Hello!
When you need to translate your items denominated in foreign currency to your own functional currency, then there’s
one little problem:
Is
that item monetary or non-monetary?
If
you determine the nature of your item incorrectly, it can lead to totally wrong presentation in the financial statements.
It’s
not
so important when you consolidate and you need to translate some
foreign subsidiary to your own presentation currency, right?
Why?
Because, the rules in IAS 21 say that in such a case, you translate all your assets and liabilities by the closing rate. That’s clear.
But
when
it comes to translating individual items and transactions in your own
financial statements to the functional currency, then the rules are more
complex and you start to look at whether the item is monetary or
non-monetary.
In
my
newest post, I explain what makes a difference between monetary and
non-monetary items and you'll find a clear table with identifying the
character
of various items in your balance sheet.
If
you need some advice about the specific item, just leave a comment below the video.
Please
feel free to share this article or forward this e-mail to your friends who can get some benefit out of it.
Thank
you!
With
appreciation,
Silvia,
IFRSbox.com
|
viernes, 19 de junio de 2015
Desde IFRSbox.com
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