If foreign currency denominated non-monetary items are measured using the fair value method, they must be translated into the functional currency using the:
A) exchange rate at the date when the value was determined;
B) exchange rate current at end of reporting period;
C) closing exchange rate for the financial year;
D) exchange rate at the transaction date.

Question

Quizplus · Accepted Answer

If foreign currency denominated non-monetary items are measured using the fair value method, they must be translated into the functional currency using the exchange rate at the date when the value was determined. This is because the fair value method requires the current market value of assets and liabilities, and the exchange rate at the date of determining the value is the most accurate reflection of that market value.

If Foreign Currency Denominated Non-Monetary Items Are Measured Using the Fair