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Presentation and Functional Currency - Accounting and Finance Assignment Help
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Assignment Task
Question
(a) Explain presentation and functional currency.
(b) A Ringgit Malaysia-based company, Kipas Berhad, set up a foreign subsidiary on 30 June 2018. Kipas Berhad subscribed €24 000 for share capital when the exchange rate was €2 = RM1. The subsidiary, Fan Inc, borrowed €72 000 and bought a non-monetary asset for €96 000. Kipas Berhad prepared its financial statements on 31 December 2018 and by that time the exchange rate had moved to €3 = RM1.
Required:-
Prepare Fan Inc's statement of financial position at 31 December 2018 in both euros and Ringgit Malaysia (RM), and calculate the exchange gain or loss arising since 30 June 2018.
1 January 2019 2.1 Rupees(R): RM1 1 January 2020 2.0 Rupees(R): RM1 31 December 2020 1.8 Rupees(R): RM1 Average rate 1 Jan 2019 — 31 Dec 2020 1.95 Rupees(R): RM1 Average rate 1 Jan 2020 — 31 Dec 2020 1.9 Rupees(R): RM1
Required:-
Calculate the exchange difference to be included in Angin Berhad's consolidated reserves for the year ended 31 December 2020. Show workings.
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