When translating into the functional currency, monetary liabilities are translated using the:
A) exchange rate current at the date the item was first recorded.
B) exchange rate prevailing at the end of the last reporting period.
C) average exchange rate for the reporting period.
D) current exchange rate at the end of the reporting period.

Question

Quizplus · Accepted Answer

Monetary liabilities are translated using the current exchange rate at the end of the reporting period, as this represents the most up-to-date valuation of the liability.

When Translating into the Functional Currency, Monetary Liabilities Are Translated