Kindly see Question No. 6 of Advanced Accounting MAy 2012....
https://220.227.161.86/27518suggans_ipcc_may12-5.pdf
My query is, why Assets & Depreciation were taken at Rs.50 and not Rs.43 when the Assets were acquired. Kindly explain in detail.
Thanks in Advance.
I think you might be referring question 6 of the attachement. So answer is since the branch is non integral foreign operation all items of balance sheet will be get converted at closing rate. hope this clarifies.
Even in Integral Foreign Operations, all the items of Balance Sheets are taken at closing rate apart from Fixed Assets which are taken at the rates preavailing at the time of acquisition.
Still not sure and clear.... can someone explain further.
Non integral operation :- for assets, liabilities, monetary assets & liabilities apply close rate for converstion.
Integral operation being an extended arm of reporting enterprise :- for fixed assets & depreciation use rate which is prevailing on date of purchase. translate it using same principles as if foreign operation had been those of reporting enterprise.
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