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CA Final · Financial Reporting · Ind AS 21 The Effects of Changes in Foreign Exchange Rates

Alpha Ltd, an Indian company whose functional currency is the rupee, changes the functional currency of a significant foreign operation from USD to EUR during the year. Compared with IAS 21, which additional disclosure does Ind AS 21 require when the functional currency changes?

Ind AS 21 requires disclosure of the fact of the change in functional currency, the reason for it, and additionally the date of the change. The date is the extra requirement over IAS 21, which asks only for the fact and the reason.

  1. AThe date of change in functional currency, in addition to the fact of the change and the reason for itCorrect
  2. BOnly the fact of the change, as the reason is not required
  3. CThe tax effect of the change on the foreign operation
  4. DThe name of the valuer who assessed the change

Explanation

IAS 21 requires disclosure of the fact of the change in functional currency and the reason. Ind AS 21 additionally requires disclosure of the date of the change. The option stating only the fact omits the reason and the date, so it is wrong.

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