Question 29 : Based on Exhibit 1, the best response to Question 2 is that Ambleu should disclose:
a restatement for local inflation.
B that assets carried at historical cost are translated at historical rates.
C the amount of foreign exchange differences included in net income.
Could anybody explain the login behind the answer to this question?
Thanks
C is the right answer because company’s must report the amount of FX difference in NI. This is an IFRS requirement.
A is wrong because there is no need to restate for inflation as Ngcorp is not experiencing inflation that would necessitate a restatement. It s too low.
B is wrong because the current rate method must be used for Ngcorp (functional currency is different from presentation currency) so assets carried at historical cost will be translated at current rates.