IAS 39 on Speculative Forward Exchange Contracts Requires That the Contract

question 22

Multiple Choice

IAS 39 on speculative forward exchange contracts requires that the contract be:

• A)revalued using spot rates throughout its life with any gains or losses to be deferred and amortized as they occur.
• B)revalued at fair value throughout its life with any gains or losses to be deferred and amortized as they occur.
• C)valued using spot rates throughout its life with any gains or losses to be taken into income as they occur.
• D)revalued at fair value throughout its life with any gains or losses to be taken into income as they occur.

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Definitions:

Government Purchases

Expenditures made by the government for goods and services that directly satisfy public consumption, investment, or need.

Federal Level

Pertaining to the national government of a country, as opposed to state, local, or municipal levels.

State Level

Refers to governmental and administrative functions that are conducted at a sub-national level, typically involving state or provincial governments within a country.

Temporary Tax Cut

A reduction in taxation rates or an increase in deductions that is implemented for a limited period of time to stimulate economic growth or provide relief during economic downturns.