Harrier Ltd Has Borrowed Substantially Using Foreign Currency Loans

question 7

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) Note disclosure of the event should be made.
• E) None of the given answers.

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Definitions:

Expense Report

A financial document that details the expenditures incurred during business operations or activities.

Personal Entertainment

Activities or products designed to provide amusement or enjoyment to individuals in their personal time.

Reimbursement

Reimbursement is the process of compensating someone for out-of-pocket expenses they have incurred on behalf of the company or another person, often related to business or travel expenses.

Taxi Fares

Charges levied for the service of transporting individuals in a taxi, typically calculated based on distance, time, or a combination of both.