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

Veda Textiles Ltd, an Indian company, changes the functional currency of its significant foreign operation in Dubai from AED to USD because the underlying circumstances have changed. Apart from the fact of the change and the reason for it, which additional disclosure does Ind AS 21 require, compared with IAS 21?

Ind AS 21 requires disclosure of the date of change in functional currency, in addition to the fact of the change and the reason for it, which is all that IAS 21 requires. This extra disclosure is a carve-in difference noted in the comparison with IAS 21.

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

Explanation

The comparison with IAS 21 in Appendix 1 states that IAS 21 requires disclosure of the fact and the reason for the change in functional currency. Ind AS 21 additionally requires disclosure of the date of change. The other items are not the additional requirement mentioned.

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