Asked by I'marii Willss on Jul 11, 2024
Verified
What exchange rate is usually used to report non-monetary assets on the statement of financial position?
A) Historical rate
B) Spot rate
C) Closing rate
D) Fair value
Historical Rate
An exchange rate used for converting transactions that have already occurred, based on the rate in effect at the time of the transaction.
Spot Rate
The current market price used for immediate delivery of a currency, commodity, or financial instrument.
Closing Rate
The exchange rate at the balance sheet date, used to convert the financial statements of a foreign subsidiary to the parent company's presentation currency.
- Grasp the use of exchange rates (historical rate, spot rate, closing rate) in foreign currency transactions and financial reporting.
Verified Answer
SS
Shiwani SarnaJul 17, 2024
Final Answer :
A
Explanation :
Non-monetary assets such as property, plant, and equipment are recorded at their historical cost on the statement of financial position. The historical rate is the exchange rate at the time the asset was acquired or the cost was incurred.
Learning Objectives
- Grasp the use of exchange rates (historical rate, spot rate, closing rate) in foreign currency transactions and financial reporting.