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CMA Final · Corporate Financial Reporting · The Effects of Changes in Foreign Exchange Rates (Ind AS 21)

Paragraph 7AA of Ind AS 21 was inserted to scope out certain items. Which items are scoped out?

Paragraph 7AA scopes out long-term foreign currency monetary items for which the entity opted for the exemption in paragraph D13AA of Appendix D to Ind AS 101, allowing it to continue its previous GAAP policy for exchange differences on those items.

  1. AAll foreign currency monetary items of first-time adopters
  2. BLong-term foreign currency monetary items for which the entity has opted for the exemption in paragraph D13AA of Appendix D to Ind AS 101, continuing its previous GAAP policyCorrect
  3. CForeign currency derivatives held for trading
  4. DNet investments in foreign operations of subsidiaries

Explanation

Paragraph 7AA scopes out long-term foreign currency monetary items where the entity opted for the D13AA exemption in Ind AS 101. Such entities continue the previous GAAP treatment of translation exchange differences recognised in the period just before the first Ind AS reporting period. It does not cover all monetary items or other categories.

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