Accounting · Foreign Currency Transactions
Parent Co (with Local Currency 'LC' as functional currency) has a non-current loan receivable of Foreign Currency 'FC' 1,000,000 from Subsidiary Co (with 'FC' as functional currency). The relevant exchange rates are: Acquisition date rate FC1 = LC1.50, Average rate FC1 = LC1.60, Closing reporting date rate FC1 = LC1.70. What rate must be used to translate this monetary loan receivable in the Parent's individual Statement of Financial Position?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Historical rate at the date the loan was advanced
- 2Acquisition rate (LC1.50)
- 3Closing rate (LC1.70)✓
- 4Average rate (LC1.60)
Correct answer
Closing rate (LC1.70)
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