Apart from Some Limited Exceptions,IAS 21 Requires That Exchange Differences

question 30

Multiple Choice

Apart from some limited exceptions,IAS 21 requires that exchange differences on monetary items shall be:

• A)deferred and recognised when the associated asset or liability is realised or settled.
• B)treated as a reserve or provision against the associated monetary item.
• C)not recognised in the accounts until the monetary asset is received or monetary liability settled.
• D)recognised as income or an expense in the reporting period in which the exchange rates change.

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Definitions:

Managerial Incentives

Incentives designed to motivate managers to make decisions that align with the owner's or shareholders' interests.

Pure Monopolist

A single supplier in a market that controls all the goods or services, with no close substitutes and high barriers to entry.

Socially Optimal

A condition or point at which the social welfare is maximized, considering the benefits and costs to society as a whole.

Regulatory Commission

A government agency responsible for controlling and supervising specific industries to enforce standards and laws for public safety and welfare.