When translating into the presentation currency, all assets and liabilities are translated using the:
A) average exchange rate for the financial period.
B) exchange rate applicable when the original transaction was recorded.
C) exchange rate current at the date of the statement of financial position.
D) exchange rate as at the start of the reporting period.

Question

Quizplus · Accepted Answer

When translating into the presentation currency, all assets and liabilities should be translated using the exchange rate current at the date of the statement of financial position, also known as the spot rate. This is because the value of assets and liabilities may have changed since they were initially recorded and the current exchange rate provides the most accurate representation of their value in the presentation currency.

When Translating into the Presentation Currency, All Assets and Liabilities