PPT: Accounting Standards (11) | Advanced Accounting for CA Intermediate PDF Download

 Page 1


Accounting Standard - AS 11
The Effects of Changes in Foreign 
Exchange Rates
Page 2


Accounting Standard - AS 11
The Effects of Changes in Foreign 
Exchange Rates
Objective
Page 3


Accounting Standard - AS 11
The Effects of Changes in Foreign 
Exchange Rates
Objective
Enterprises carrying on Activities involving Foreign 
Exchange
Transactions in 
Foreign Currencies ($)
Foreign Operations
Translation of $ into the Enterprise’s Reporting Currency 
To Include in the Financial Statements of Enterprise
to
Page 4


Accounting Standard - AS 11
The Effects of Changes in Foreign 
Exchange Rates
Objective
Enterprises carrying on Activities involving Foreign 
Exchange
Transactions in 
Foreign Currencies ($)
Foreign Operations
Translation of $ into the Enterprise’s Reporting Currency 
To Include in the Financial Statements of Enterprise
to
Principal 
issues in 
accounting
Which 
exchange rate 
to use?
How to recognise in 
Financial Statements 
the financial effect 
of changes in 
exchange rates ?
Page 5


Accounting Standard - AS 11
The Effects of Changes in Foreign 
Exchange Rates
Objective
Enterprises carrying on Activities involving Foreign 
Exchange
Transactions in 
Foreign Currencies ($)
Foreign Operations
Translation of $ into the Enterprise’s Reporting Currency 
To Include in the Financial Statements of Enterprise
to
Principal 
issues in 
accounting
Which 
exchange rate 
to use?
How to recognise in 
Financial Statements 
the financial effect 
of changes in 
exchange rates ?
Scope
? Accounting for transactions in 
foreign currencies.
? Translating the financial 
statements of foreign operations.
? For transactions in the nature of 
Forward exchange contracts.
Presentation in a cash flow 
statement (AS-3). 
Restatement of financial 
statements from its reporting 
currency into another currency 
for the convenience of users.
Exchange differences arising 
from foreign currency 
borrowings to the extent that 
they are regarded as an 
adjustment to interest costs (AS-
16).