TRUE or FALSE
The currency in which most of the inflows and outflows of the entity is denominated pertains to transaction currency.
Monetary items are currencies held and are assets/liabilities to be received or paid in undeterminable amount of money.
Mr. Ang holds a position as a director both in Kemerlu Co. and Eklavu Co. therefore Kemerlu and Eklavu are related parties.
Any of the following should be met for borrowing cost to be capitalized, borrowing cost are being incurred; activities necessary to prepare the asset for its intended used or sale are being undertaken; expenditures for the asset are being incurred.
The capitalization rate used to determine the capitalizable borrowing cost should be disclosed.
When translating income and expenses exchange rates at the dates of transactions will be used, however average rate can be accepted even rates fluctuate significantly.
The borrowing cost to be capitalized in general borrowing cost is the lower between the amount computed using the average expenditure multiplied by the capitalization rate and total interest of the borrowings.
Assets that are ready for their specific/intended use when purchased are classified as qualifying asset.
Exchange differences in translating financial statements are recognized in profit or loss, while monetary and non-monetary exchange differences are reflected in OCI.
The mere existence of a related party should be disclosed despite of not having any transactions with them.
Related party transactions and their outstanding balances are only reported in the group’s consolidated FS.
As per PAS 24 related party’s doubtful debts recognized on the outstanding balance should be disclosed.