When translating into the functional currency foreign currency denominated non-monetary items measured using historical cost must be translated using the:
A) rate current at end of reporting period;
B) average rate for the reporting period;
C) exchange rate at the date of the transaction;
D) rate prevailing at the end of the last financial year.

Question

Quizplus · Accepted Answer

Non-monetary items measured using historical cost, such as property, plant, and equipment, are translated at the exchange rate at the date of the transaction. This is because the historical cost of these assets reflects their original cost in the foreign currency at the time of acquisition, and this cost should not be adjusted for subsequent changes in the exchange rate.

When Translating into the Functional Currency Foreign Currency Denominated Non-Monetary