this document is a complete summary as well as notes taken from all the questions to form a complete summary of all scenarios that form part of one set of consolidated statements. I show you where everything goes as well as how to calculations
ON TRANSACTION DATE : 31 March
Dr PPE 1 788 000
CR creditors 1 788 000
($100 000 x R17.88)
ON YEAR END ( 30 April )
DR exchange rate difference (PL) 39 000
CR Creditors 39 000
($100 000 x 18.27) - 1 788 000)
2) PPE @ REVALUED VALUE
a. Lets say payment occurs on 31 march 2020 (so NO more creditor)
b. And then the PPE is revalued on year end to $110 000
c. Thus there is a revaluation
d. There is NO FCTR affect on the revaluation the exchange rate is only to determine the R value of the
PPE
ON TRANSACTION DATE : 31 March
Dr PPE 1 788 000
CR Bank 1 788 000
($100 000 x R17.88)
ON YEAR END ( 30 April )
DR PPE 221 700
CR Revaluation surplus (OCI) 221 700
($110 000 x 18.27) - 1 788 000)
, 2) IAS 21 with IAS 2 (inventory )
a. The CP on transaction date = use the spot rate on that date
b. NRV @ year end
i. You need to translate at the exchange rate that applies on year end
Example of IAS 21 with inventory
Information
- Purchase inventory in USA on 31 March 2020 for $50 000 (FC= ZAR)
- Payment is made on 31 March 2020
- The year end is 30 April 2020
- NRV on year end is $48 000
exchange rates :
31-Mar $1= R17.88
30-Apr $1= R18.27
ANSWER:
ON TRANSACTION DATE : 31 March
Dr Inventory 894 000
CR Bank 894 000
($50 000 x R17.88)
On 30 APRIL
- Assume we have all the inventory on hand
- Inventory is shown at the LOWER of CP or NRV
ON YEAR END ( 30 April )
DR NRV- write down (PL) 17 040
CR Inventory (SFP) 17 040
(894 000 - ($48 000 x 18.27)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Talizamazoue. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.84. You're not tied to anything after your purchase.
