Exchange differences

[noor]

hiii

how are u?

i am new here



i did not study any thing about exchange differences so i want to help me to solve

this problem

 

[Fidget]

Gotta love people who haven't done their homework requiring "immediate assistance"!

Case study 1: Record the purchase at the spot rate on the day the order was made because that's the amount you expect to pay but if exchange rates change by the time the invoice is paid, there will be either a gain or loss based on the difference between the exchange rate at the time the order was placed and when the invoice was paid.

Case study 2: It's the amount of the liability/debt that changes here and not the booked value of the asset or sale. So the booked liability for the asset is $3m. Retranslated at year end becomes $4m. So there's a $1m loss on retranslation.

The booked debt for the sale is $2m. Retranslated at year end becomes $2.3m. So there's a $0.3m gain on retranslation.

 

[noor]

Gotta love people who haven't done their homework requiring "immediate assistance"!

Case study 1: Record the purchase at the spot rate on the day the order was made because that's the amount you expect to pay but if exchange rates change by the time the invoice is paid, there will be either a gain or loss based on the difference between the exchange rate at the time the order was placed and when the invoice was paid.

Case study 2: It's the amount of the liability/debt that changes here and not the booked value of the asset or sale. So the booked liability for the asset is $3m. Retranslated at year end becomes $4m. So there's a $1m loss on retranslation.

The booked debt for the sale is $2m. Retranslated at year end becomes $2.3m. So there's a $0.3m gain on retranslation.

thank u so much