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Advanced Financial Accounting Assignment PDF

   

Added on  2020-12-28

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Advanced FinancialAccounting
Advanced Financial Accounting Assignment PDF_1
Table of ContentsINTRODUCTION...........................................................................................................................3Q1) Effect of foreign exchange rate using AASB 121....................................................................3a. Difference between monetary item and non-monetary items.................................................3b. Accounting treatment of foreign currency monetary items at reporting date.........................4c. Accounting treatment for qualifying monetary item...............................................................5Q2) Gains recognised on sales of assets are reversed on consolidation..........................................6CONCLUSION ..............................................................................................................................7REFERENCERS..............................................................................................................................1
Advanced Financial Accounting Assignment PDF_2
INTRODUCTIONA part of Accounting that record, summaries and treats money as a means of comparingand measuring economic performance rather of as a component of production is known asfinancial accounting (What is financial accounting, 2018). It is related to the process of preparingfinancial statements that companies use to show their financial position and performance tooutside shareholder and other people. The international accounting standard board (IASB)develop important standard which are followed for financial reporting. In this project report, with effect of change in foreign exchange rate the differencebetween monetary and non-monetary item, treatment of foreign currency monetary item andtreatment of qualifying monetary item is discussed. The adjustment that may need to be made inrelation to an asset sold within the consolidated group is described.Q1) Effect of foreign exchange rate using AASB 121.The Australian accounting standard board has develop accounting standard AASB 121which is “The effect of change in Foreign exchange Rate” under Section 334 of the companiesAct 2001 on 15 July 2004. The main two objective of this Act is, companies may have dealing ofoperation in foreign currencies and entity may present its financial statements in foreigncurrency.a. Difference between monetary item and non-monetary items.Monetary items Non-monetary items These are assets and liabilities that express aparticular amount of currency to be convertibleat a particular period of time. Monetary assetssuch as cash, trader and monetary liabilitieslike account payable etc. that has a fixedexchange value which is not effected byinflation and deflation (Christian, Silvana andAlessandra, 2013).The primary attribute of these monetary item isThese items are refer to those assets andliabilities whose price might changes in term ofdollar over a period of time. For example rawmaterial, property etc. and liabilities warrantiespayable income tax credits etc. The essential feature of non-monetary item isthe absences of a right to obtain or duty to
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