Page 93 - SBR Integrated Workbook STUDENT S18-J19
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Foreign exchange in individual financial statements
Recording overseas transactions
2.1 Initial transactions and settlements
Overseas transactions must be translated into the entity’s functional currency before
they are recorded.
Initial transaction Cash settlement
Translate using Translate using
spot (historic) spot (historic)
exchange rate exchange rate
If exchange rates have moved between the initial transaction and the
settlement date then a foreign exchange gain or loss will arise. This is
recorded in the statement of profit or loss.
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