ACC 703 Lecture Notes - Accounts Receivable, Price Level, Deferral
4 Dec 2012
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Non-monetary assets and liabilities brought using price level and adjusted in foreign currency: adjust using general price level index. Gains and losses brought through to is in foreign currency. Use exchange rate to bring to cdn dollar for every asset. Summarize and explain ias 21 and ias 29: functional currency approach, sapi in a hyperinflationary environment. Must use ias 29 not ias 21: do they pay for goods, borrow or lend in the foreign currency. Only exception is if they are in an inflationary environment. If foreign currency = functional currency, use foreign exchange rate method. If functional currency is cdn dollar, use temple method. Suggest appropriate communication with shareholders so that they understand investment in sapi. Comment on a bonus plan for management. Uses foreign currency as functional currency: current rate used to translate sfp. Historical rate for shareholders" equity accounts (may use average rate for is) Exchange gains/losses deferred in separate component of shareholders" equity.
