Page 415 - SBR Integrated Workbook STUDENT S18-J19

Answers

Example 2 – continued

3 The purchase of property, plant and equipment (PPE) would be
translated using the spot rate and recorded at $10 million (20m dinar/2)

Dr PPE $10m

Cr Cash $10m

PPE is a non-monetary asset and so is not subsequently retranslated.
However, its fair value must be translated into dollars using the rate on
the date it was determined. The fair value of the asset is therefore $11.7
million (35m dinar/3). PPE revaluation gains are recorded in other
comprehensive income.

Dr PPE $1.7m

Cr OCI $1.7m

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