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

Sahyadri Textiles Ltd, an Indian company reporting in rupees, changed the functional currency of its significant foreign operation in Dubai from AED to USD during the year. Which disclosure does Ind AS 21 require in addition to the fact of the change and the reason for it, a requirement that goes beyond IAS 21?

Ind AS 21 requires disclosure of the date of change in functional currency, in addition to the fact of the change and its reason. IAS 21 asks only for the fact and the reason, so the date is the extra Ind AS requirement.

  1. AThe date of change in functional currencyCorrect
  2. BThe average exchange rate for the year
  3. CThe auditor's confirmation of the new currency
  4. DThe tax effect of the change on deferred tax

Explanation

The Comparison with IAS 21 states that IAS 21 requires disclosure of the fact and reason for a change in functional currency, while Ind AS 21 requires an additional disclosure of the date of change. The other options are not the additional requirement mentioned in that comparison.

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