Aus Co Ltd has a foreign operation based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: \[\begin{array} { | l | r |} \hline & ¥ 000 \\ \hline \text { Machinery (at cost purchased 1 July 2013) } & 85000 \\ \hline \text { Inventory on hand (purchased last quarter 2015) } & 16000 \\ \hline \text { Depreciation expense-machinery } & 8200 \\ \hline \text { Land (purchased 1 July 2013, revalued 1 June 2015) } & 150000 \\ \hline \end{array}\] Exchange rate information is: \[\begin{array} { | l | l | } \hline \text { July } 2013 & ¥ 1.00 = \text { AS0.0136 } \\ \hline \text { Average for year ended } 30 \text { June } 2015 & ¥ 1.00 = \text { AS0.0153 } \\ \hline 1 \text { June } 2015 & ¥ 1.00 = \text { A\$0.0146 } \\ \hline \text { Last quarter } 2015 & ¥ 1.00 = \text { A\$0.0150 } \\ \hline 30 \text { June } 2015 & ¥ 1.00 = \text { A\$0.0165 } \\ \hline \end{array}\] What is the amount at which each item would be translated (rounded to the nearest A$)?

A) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1402500 \\ \hline \text { Inventory on hand } & 264000 \\ \hline \text { Depreciation expense-machinery } & 125460 \\ \hline \text { Land } & 2475000 \\ \hline \end{array}\] B) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1156000 \\ \hline \text { Inventory on hand } & 240000 \\ \hline \text { Depreciation expense-machinery } & 111520 \\ \hline \text { Land } & 2190000 \\ \hline \end{array}\] C) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1402000 \\ \hline \text { Inventory on hand } & 233600 \\ \hline \text { Depreciation expense-machinery } & 111520 \\ \hline \text { Land } & 2040000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1156000 \\ \hline \text { Inventory on hand } & 264000 \\ \hline \text { Depreciation expense-machinery } & 135300 \\ \hline \text { Land } & 2040000 \\ \hline \end{array}\] A) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1402500 \\ \hline \text { Inventory on hand } & 264000 \\ \hline \text { Depreciation expense-machinery } & 125460 \\ \hline \text { Land } & 2475000 \\ \hline \end{array}\] B) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1156000 \\ \hline \text { Inventory on hand } & 240000 \\ \hline \text { Depreciation expense-machinery } & 111520 \\ \hline \text { Land } & 2190000 \\ \hline \end{array}\] C) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1402000 \\ \hline \text { Inventory on hand } & 233600 \\ \hline \text { Depreciation expense-machinery } & 111520 \\ \hline \text { Land } & 2040000 \\ \hline \end{array}\] D) \[\begin{array} { | l | r | } \hline & { \text { A\$ } } \\ \hline \text { Machinery } & 1156000 \\ \hline \text { Inventory on hand } & 264000 \\ \hline \text { Depreciation expense-machinery } & 135300 \\ \hline \text { Land } & 2040000 \\ \hline \end{array}\] A

A) not defined in AASB 121. B) the difference between the currency rates. C) the rate at which one currency can be exchanged for another. D) all of the given answers. A) not defined in AASB 121. B) the difference between the currency rates. C) the rate at which one currency can be exchanged for another. D) all of the given answers. C

Lennon Ltd has two foreign operations based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: \[\begin{array} { | l | r | r | } \hline \text { In Japanese yen } ( ¥ ) & \text { Yoko Ltd } & \text { Ono Ltd } \\ \hline \text { Machinery (at cost purchased 1 July 2013) } & 85000 & 100000 \\ \hline \text { Inventory on hand (purchased second quarter 2015) } & 1000 & 25000 \\ \hline \text { Depreciation expense-machinery } & 8200 & 10000 \\ \hline \text { Land (purchased 1 July 2013, revalued 1 June 2015) } & 150000 & 200000 \\ \hline \end{array}\] Exchange rate information is: \[\begin{array} { | l | l | } \hline \text { July } 2013 & \text { A\$1.00 } = ¥ 74 \\ \hline \text { Average for year ended } 30 \text { June } 2015 & \text { A\$1.00 } = ¥ 65 \\ \hline 1 \text { June } 2015 & \text { A\$1.00 } = ¥ 68 \\ \hline \text { Second quarter } 2015 & \text { A\$1.00 } = ¥ 67 \\ \hline 30 \text { June } 2015 & \text { A\$1.00 } = ¥ 61 \\ \hline \end{array}\] The translation from Japanese yen to Australian dollars resulted in the following balances (rounded to the nearest ¥000): \[\begin{array} { | l | r | r | } \hline \text { In Japanese yen } ( ¥ \text { ) } & \text { Yoko Ltd } & \text { Ono Ltd } \\ \hline \text { Machinery (at cost purchased 1 July 2013) } & 1149 & 1639 \\ \hline \text { Inventory on hand (purchased second quarter 2015) } & 239 & 410 \\ \hline \text { Depreciation expense-machinery } & 111 & 154 \\ \hline \text { Land (purchased 1 July 2013, revalued 1 June 2015) } & 2205 & 3278 \\ \hline \end{array}\] Which of the following translation processes were applied to Yoko Ltd and Ono Ltd,respectively,for the year ended 30 June 2015?

A) functional currency; presentation currency B) functional currency; functional currency C) presentation currency; functional currency D) presentation currency; presentation currency A) functional currency; presentation currency B) functional currency; functional currency C) presentation currency; functional currency D) presentation currency; presentation currency

Exam 33: Translating the Financial Statements of Foreign Operations

Aus Co Ltd has a foreign operation based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: ¥000 Machinery (at cost purchased 1 July 2013) 85000 Inventory on hand (purchased last quarter 2015) 16000 Depreciation expense-machinery 8200 Land (purchased 1 July 2013, revalued 1 June 2015) 150000 Exchange rate information is: July 2013 ¥1.00= AS0.0136 Average for year ended 30 June 2015 ¥1.00= AS0.0153 1 June 2015 ¥1.00= A \0 .0146 Last quarter 2015 ¥1.00= A \0 .0150 30 June 2015 ¥1.00= A \0 .0165 What is the amount at which each item would be translated (rounded to the nearest A$)?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

'Exchange rate' is:

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

As prescribed in AASB 121,when re-measuring financial statements of foreign operations to presentation currency,which of the following identifies all items to be remeasured at historic rates?

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

When translating non-monetary liabilities into the functional currency,the translation rate used is:

(Multiple Choice)

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Question 4

Lennon Ltd has two foreign operations based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: In Japanese yen (¥) Yoko Ltd Ono Ltd Machinery (at cost purchased 1 July 2013) 85000 100000 Inventory on hand (purchased second quarter 2015) 1000 25000 Depreciation expense-machinery 8200 10000 Land (purchased 1 July 2013, revalued 1 June 2015) 150000 200000 Exchange rate information is: July 2013 A \1 .00 =¥74 Average for year ended 30 June 2015 A \1 .00 =¥65 1 June 2015 A \1 .00 =¥68 Second quarter 2015 A \1 .00 =¥67 30 June 2015 A \1 .00 =¥61 The translation from Japanese yen to Australian dollars resulted in the following balances (rounded to the nearest ¥000): In Japanese yen (¥ ) Yoko Ltd Ono Ltd Machinery (at cost purchased 1 July 2013) 1149 1639 Inventory on hand (purchased second quarter 2015) 239 410 Depreciation expense-machinery 111 154 Land (purchased 1 July 2013, revalued 1 June 2015) 2205 3278 Which of the following translation processes were applied to Yoko Ltd and Ono Ltd,respectively,for the year ended 30 June 2015?

(Multiple Choice)

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Question 5

When translating the financial statements of a foreign operation to presentation currency,AASB 121 requires any gain or loss on translation of the accounts to be:

(Multiple Choice)

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Question 6

The translation approach required by AASB 121 in translating to presentation currency is similar to the 'current rate' method required under the former AASB 1012.

(True/False)

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Question 7

Yarra Manufacturing Ltd is an Australian registered entity that has a branch in Singapore,Kew Ltd.Kew Ltd has a foreign operation in China.The foreign operation maintains its accounting records in Chinese yuan.The functional currency of the Chinese operation is Singapore dollar.The presentation currency of Kew Ltd is Australian dollar. At reporting date,the translation of the financial statements of the Chinese foreign operation resulted in a loss of S$6500 and the translation of the financial statements of Kew Ltd to its presentation currency resulted to a gain of A$4500. Which of the following results is consistent with AASB 121 with respect to Yarra Manufacturing Ltd?

(Multiple Choice)

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Question 8

As prescribed in AASB 121,when remeasuring financial statements of foreign operations to functional currency,which of the following identifies all items to be re-measured at historic rates?

(Multiple Choice)

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Question 9

Under the translation method required by AASB 121,the approach to translating a foreign operation's accounts includes:

(Multiple Choice)

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Question 10

Exchange differences arising from translation to the presentation currency are not recognised in profit or loss because the changes in exchange rates have little or no direct effect on the present and future cash flows from operations.

(True/False)

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Question 11

AASB 121 prescribes alternative methods for the translation of the accounts of foreign operations.It depends upon whether these operations are integrated or self-sustaining.

(True/False)

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Question 12

Contrast how statement of financial position items of foreign operations are translated between translation to functional currency and translation to presentation currency as prescribed in AASB 121.

(Essay)

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Question 13

Exchange differences resulting from the translation of foreign operations to presentation currency are shown:

(Multiple Choice)

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Question 14

The former AASB 1012 treatment is consistent with the requirements of AASB 121.

(True/False)

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Question 15

AASB 121 specifies that post-acquisition movements in equity other than retained profits or accumulated losses are translated at:

(Multiple Choice)

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Question 16

Explain how non-controlling interests are determined following the translation of the financial statements.

(Essay)

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Question 17

Explain at what exchange rate income and expenses of a foreign operation are generally translated,and the exception that exists to the 'general rule'.

(Short Answer)

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Question 18

In the process of consolidating the translated financial accounts of a foreign operation,what will be the form of the journal entry required to eliminate the foreign currency effect of a purchase of inventory by the subsidiary from the parent entity? Assume that the value of the foreign currency of the foreign operation has increased relative to the reporting currency.

(Multiple Choice)

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Question 19

If the assets of a foreign operation exceed its liabilities,and the value of the Australian dollar falls relative to the currency of the foreign operations,there will be:

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Question 20

Showing 1 - 20 of 52

Exam 33: Translating the Financial Statements of Foreign Operations

'Exchange rate' is:

As prescribed in AASB 121,when re-measuring financial statements of foreign operations to presentation currency,which of the following identifies all items to be remeasured at historic rates?

When translating non-monetary liabilities into the functional currency,the translation rate used is:

When translating the financial statements of a foreign operation to presentation currency,AASB 121 requires any gain or loss on translation of the accounts to be:

The translation approach required by AASB 121 in translating to presentation currency is similar to the 'current rate' method required under the former AASB 1012.

As prescribed in AASB 121,when remeasuring financial statements of foreign operations to functional currency,which of the following identifies all items to be re-measured at historic rates?

Under the translation method required by AASB 121,the approach to translating a foreign operation's accounts includes:

Exchange differences arising from translation to the presentation currency are not recognised in profit or loss because the changes in exchange rates have little or no direct effect on the present and future cash flows from operations.

AASB 121 prescribes alternative methods for the translation of the accounts of foreign operations.It depends upon whether these operations are integrated or self-sustaining.

Contrast how statement of financial position items of foreign operations are translated between translation to functional currency and translation to presentation currency as prescribed in AASB 121.

Exchange differences resulting from the translation of foreign operations to presentation currency are shown:

The former AASB 1012 treatment is consistent with the requirements of AASB 121.

AASB 121 specifies that post-acquisition movements in equity other than retained profits or accumulated losses are translated at:

Explain how non-controlling interests are determined following the translation of the financial statements.

Explain at what exchange rate income and expenses of a foreign operation are generally translated,and the exception that exists to the 'general rule'.

If the assets of a foreign operation exceed its liabilities,and the value of the Australian dollar falls relative to the currency of the foreign operations,there will be:

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After the End of the Reporting Period

Segment Reporting

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Accounting for Foreign Currency Transactions

Accounting for Corporate Social Responsibility

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