What the effects of changes in foreign exchange rates

Assignment Help Financial Accounting
Reference no: EM132566385

One of CCC's subsidiaries, DEF ltd, which is registered and operated in Hong Kong was acquired on 1 January 2014 at which time the share capital and reserves amounted to HK$ 24m. DEF ltd is fairly autonomous and its functional currency is the Hong Kong Dollar (HK$). During the year to 31 December 2014, DEF ltd made a profit of HK$ 3,000,000.

The exchange movements during the year to 31 December 2014 were as follows:

1 January 2014 £1 = HK$ 12

Average for the year £1 = HK$ 12.5

31 December 2014 £1 = HK$ 13

Required

Question 1: Discuss the criteria applied by IAS 21 'The Effects of Changes in Foreign Exchange Rates' to determining the functional currency. Calculate the exchange gain/loss of on the above subsidiary in the consolidated accounts.

 

Reference no: EM132566385

Questions Cloud

Law enforcement professionals encounter : Discuss problems that law enforcement professionals encounter when computer crime laboratories fail to provide state-of-the-art technology
Discuss the major indicators of women health : Identify and discuss the major indicators of women's health. Identify and discuss the barriers to adequate health care for women.
How an effective accounting system can improve the accuracy : How An effective accounting system (AIS) can improve the accuracy and efficiency of accounts related operations of an organization.
What is the present value of the option to expand : Given the above information and based on static analysis, should the company go ahead with its investment?
What the effects of changes in foreign exchange rates : Discuss the criteria applied by IAS 21 'The Effects of Changes in Foreign Exchange Rates' to determining the functional currency.
Why policy practitioners need variety of skills : Discuss why policy practitioners need a variety of skills, rather than only one or two, to be effective in changing policies.
What tactics and methods do they use to influence : What tactics and methods do they use to influence the Congress and the president?
What are the barriers to nurses participation : What are the barriers to nurses' participation in the development of health care policy at the state or national level or in an organization.
What is the expected rate of? inflation : If the nominal rate of interest is 12.28% and the real rate of interest is 7.37%?, what is the expected rate of? inflation?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd