Harrier Ltd Has Borrowed Substantially Using Foreign Currency Loans

question 41

Multiple Choice

Harrier Ltd has borrowed substantially using foreign currency loans.An unexpected major downturn in the Australian economy after reporting date has substantially weakened the Australian dollar,increasing the size of the debt materially.According to AASB 110,how should this event be reported in the financial statements?

• A) The foreign currency debt should be restated at the new exchange rates and the loss recognised.
• B) No reporting is required.
• C) Harrier Ltd's bank and/or debenture trustees should be notified of the potential that the company may break its debt covenant.
• D) A note disclosure of the event should be made.

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Definitions:

Collusion

An agreement between firms to limit competition and manipulate markets in their favor, often in ways that are illegal or unethical.

Monopolist

A monopolist is an entity that has exclusive control over the supply of a particular good or service, facing no competition in its market.

Oligopolized Industry

An economic condition where a few firms dominate a market, often leading to limited competition and potential collaboration on pricing and output.

Differentiated Product

A product that differs from similar market offerings by brand, quality, features, or customer service, giving it a unique selling point.