Accounting · Accounting Standard 11 (AS 11)

Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: At the end of an accounting period, all foreign currency transactions must be reported in the financial statements using the historical exchange rate from the date of their initial recording. Reason R: According to the provisions of AS 11, monetary foreign exchange items are translated at the closing rate on the balance sheet date, and any resulting exchange differences are recognized in the Profit and Loss statement. In the light of the above statements, choose the most appropriate answer from the options given below: