When translating the revenue and expenses in the statement of profit or loss and other comprehensive income, theoretically each item of revenue and expense should be translated using the spot exchange rate between the:
A) functional currency and the foreign currency on the reporting date;
B) presentation currency and the functional currency on the reporting date;
C) functional currency and the foreign currency on the date the transaction occurred;
D) presentation currency and the local currency on the transaction date.

Question

Quizplus · Accepted Answer

Theoretically, each item of revenue and expense should be translated using the spot exchange rate between the functional currency and the foreign currency on the date the transaction occurred. This approach reflects the value of the transactions at the time they were made.

When Translating the Revenue and Expenses in the Statement of Profit