logo

Advanced Financial Accounting Assignment Solution (Doc)

7 Pages1692 Words106 Views
   

Added on  2020-10-23

Advanced Financial Accounting Assignment Solution (Doc)

   Added on 2020-10-23

ShareRelated Documents
Advanced FinancialAccounting
Advanced Financial Accounting Assignment Solution (Doc)_1
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Different between monetary and non monetary items............................................................12. Accounting treatment when reporting entity is having foreign currency monetary items......33. How accounting treatment of qualifying monetary items differs from other foreign currencymonetary items............................................................................................................................3Explanation of why gains recognised on sale of assets get reversed..........................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
Advanced Financial Accounting Assignment Solution (Doc)_2
INTRODUCTIONAdvanced financial accounting includes consolidation, partnership and foreign currencytransactions. In consolidation a big company acquire a small company and create a new entity.The consolidated financial statements shows combined liabilities, assets, revenues, expenses andequities of the group. In partnership two or more persons combine their business to increase theefficiency of executing operations. In foreign currency transactions describes operationalactivities of an organisation that are performed to earn a currency which is totally different fromthe functional currency of the business (Arnold, 2012). This project reports is mainly based on AASB 121's effect on foreign exchange rates andalso covers difference between monetary and non monetary items with examples, accountingtreatment of foreign currency monetary items and explanation of variation in the reportingsystem of qualifying monetary system and other foreign currency monetary items are alsodiscussed under this project report.MAIN BODY1. Different between monetary and non monetary itemsMonetary item: An asset or liability which is having value in money form and will notchange in future is called a monetary item. It has a fixed exchange value which is not going tobe affected by inflation or deflation in economy of the country. The company can face loss whenit is holding a monetary item when market price is rising because real value of currency will fallin this situation. In the same situation holding a monetary liability will result in profits as thecompany has to pay lower amount than real value of the currency in future (Bhattacharyya,2012).Example: It includes cash, account payable and receivables, marketable securities, salestaxes and notes payable and other owed debts of an organisation.Non monetary items: It refers to those items whose value in money may change infuture. The assets and liabilities that are shown in balance sheet and are not in cash areconsidered as non monetary items. The value of such items may change with time or fluctuateand changed over a time period. In other words, it can be defined as the asset or liability whodoes not have any fixed monetary value and depends upon the economic condition of a country.It cannot be converted in to cash and cash equivalents easily (Cuckston, 2013). 1
Advanced Financial Accounting Assignment Solution (Doc)_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Advanced Financial Accounting Assignment PDF
|8
|2223
|192

Advanced Financial Accounting Doc
|7
|1841
|257

Advance Financial Accounting: Monetary vs Non-Monetary Items, Foreign Currency Treatment, Consolidation Gains
|7
|1465
|251

Financial Analysis & Business Valuation | Assignment - AYN505
|10
|1247
|88

FINANCIAL REPORTING FOR MANAGEMENT MEETING REPORT 2022
|3
|352
|19

BUACC 5930 - Accounting Concepts and Practices
|11
|1895
|56