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

An accountant at Kaveri Exports Ltd reads Ind AS 21 and finds the term 'balance sheet' used instead of 'statement of financial position'. What is the correct understanding of this difference from IAS 21?

The use of 'balance sheet' in place of 'statement of financial position' is simply different terminology in Ind AS 21 compared with IAS 21. It does not alter recognition, measurement or scope, so it has no effect on the amounts reported.

  1. AIt is a change in recognition requirements that alters the amounts reported
  2. BIt is merely different terminology used in Ind AS 21 and does not change the substanceCorrect
  3. CIt indicates that Ind AS 21 applies only to balance sheet items and not profit or loss
  4. DIt means Ind AS 21 excludes foreign operations

Explanation

The comparison with IAS 21 notes that different terminology is used, for example 'balance sheet' instead of 'statement of financial position'. This is a terminology point only. It does not change scope or recognition of exchange differences.

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