BACC11 Business

Academic Anxiety?

Get an original paper within hours and nail the task

156 experts online

Free Samples

BACC11 Business

.cms-body-content table{width:100%!important;} #subhidecontent{ position: relative;
overflow-x: auto;
width: 100%;}

BACC11 Business

0 Download5 Pages / 1,159 Words

Course Code: BACC11
University: Holmesglen Institute is not sponsored or endorsed by this college or university

Country: Australia

Using AASB 121 The Effects of Changes in Foreign Exchange Rates as your guide,answer the following 3 points:• Explain the difference between monetary items and non-monetary items, providing two examples of each• Discuss the accounting treatment required when a reporting entity has foreign currency monetary items at reporting date• Explain how the accounting treatment for a qualifying monetary items differs from other foreign currency monetary itemsExplain why gains recognised on sale of assets between entities within a group are reversed on consolidation. Discuss any other adjustments that may need to be made in relation to an asset sold within the consolidated group.

As per AASB 121, the monetary items considered as the currency items held and the liabilities and assets to be paid or received in fixed or the determinable units for the currency. The required characteristics of monetary item is considered as the right of receiving determinable or fixed number for the currency units. Examples for monetary items are employee benefits and pensions payments to be paid in cash and cash dividends recorded as liability.
On the contrary, the required feature of non-monetary item is nonappearance of right for receiving the the determinable or fixed number for the currency units. Examples for non – monetary items are intangible assets and goodwill required to be settled through delivering the non-monetary assets (, 2018). Major differences among monetary and the non-monetary items are as follows –

Monetary items can be transformed into fixed money readily whereas the non monetary items cannot be converted into fixed money immediately or in short span of time
Liquidity of the monetary items is high whereas the non-monetary items are liquid by nature.
Monetary types of items are cash, account receivable, cash equivalent, inventories and notes receivables. Conversely, non-monetary types of items are copyrights, goodwill, PPE and patents (Moore & Wang, 2014).
Accounting treatment for foreign currency monetary items

Foreign currency transactions are denominated or require to be settled in foreign currency when the entity sells or buys any services or goods those are denominated in foreign currency. It further includes lending or borrowing while the funds are denominated in foreign currency and disposal or acquiring the asset or liabilities denominated in foreign currency. On the initial recognition the transaction related to foreign currency must be recorded in functional currency through application of foreign currency amount. It is recorded through application of the spot rate of exchange between foreign currency and functional currency at the transaction date.
The transaction date here is the date when the transaction qualifies for the 1st time to be recognised as per Australian equivalent to the IFRSs. Practically, the approximate actual rate at transaction date is used. For instance, the average rate for the month or week may be used for all the foreign currency transaction taking place during the period under consideration (, 2018). However, in case of significant fluctuation in the rate of exchange, using the average rate will be inappropriate. At closing of reporting period the monetary items under foreign currency must be translated through applying the closing rate.
However, carrying amount of the item is established through application of other relevant standards. For instance, the property, plant and equipment shall be measured at fair value or historical cost as per the requirement of AASB 116 property, plant and equipment. The exchange differences created from the settlement of monetary items at the rate that varies with the rate at which they were recorded initially or translated during the previous financial period shall be recognised under the profit or loss statement under the period in which they are created.
Difference between accounting treatment of qualifying monetary items and other foreign currency monetary items  
Qualifying asset is the asset under construction or the asset being made ready for future productive purpose by the entity under its own operation or the asset that is constructed for another entity’s use as per the construction contract. As per Para 51 of ASA 20A on foreign currency translation, for the qualifying asset particular exchange differences shall be included under cost of acquisition for the qualifying asset. However, the difference is limited to the amount generated from monetary items that can be attributed reasonably to qualifying assets. Further, the differences took place before the asset ceased to be the qualifying asset shall be included (Tillmann, 2016).
The exchange difference shall be included in qualifying asset’s cost under the period that will otherwise shall be debited or credited to the profit and loss account or equivalent account. While capitalising the exchange difference it shall be kept in mind that the asset shall not be carried at the amount exceeding the recoverable amount (Hoyle, Schaefer & Doupnik 2015). Any existing differences in balance sheet from deferred exchange at the opening of 1st accounting period under which the part is applied shall be accounted for as per Para 51.
On the contrary, the exchange difference associated with the foreign currency monetary items forms the part of the net investment in the self-sustaining foreign operation. It is required to be translated at current spot rate (Machlup, 2013). Further, the exchange difference generated with regard to the foreign currency monetary items that directly relates to or can be reasonably attributed to the qualifying asset must be included under acquisition cost of the asset.
Reasons why gains recognised from sale of the asset are reversed under consolidation
Consolidated financial statement prepared under consolidation is the statement of group under which liabilities, assets, income, equities, expenses and cash flows of parent entity and the subsidiaries are recorded as the statement for single entity. Intra-group sales take place while the inventories are transferred among the parent company to the subsidiary or within the group (Müller, 2014). However, the sales are not considered as consumed until the item is sold to the same entity or is re-sold to any independent 3rd party.
In such instance, one side records the profit even if no transaction has been taken place. It leads to overstatement of various accounts under consolidated reports. Hence, the inventory transfer shall be identified and the consolidated retained earnings shall be debited and consolidated closing inventory shall be credited with the transfer value (Ghosh, Ostry & Chamon, 2016).
For instance, if any product amounting to $ 10,000 is sold within the group the consolidated statement will debit the retained earnings by $ 10,000 and closing inventory shall be credited with $ 10,000. Therefore, the gains recognised from sale of any asset among the entities under the group shall be reversed under consolidation. Other adjustment required is debiting the retained earning account and crediting the inventory account with the value of sale.    
Ghosh, A. R., Ostry, J. D., & Chamon, M. (2016). Two targets, two instruments: monetary and exchange rate policies in emerging market economies. Journal of International Money and Finance, 60, 172-196.
Hoyle, J. B., Schaefer, T., & Doupnik, T. (2015). Advanced accounting. McGraw Hill. (2018). AASB 121 – The Effects of Changes in Foreign Exchange Rates – July 2004 . [online] Retrieved 4 October 2018, 
Machlup, F. (2013). The theory of foreign exchanges. In International Monetary Economics (pp. 19-62). Routledge.
Moore, T., & Wang, P. (2014). Dynamic linkage between real exchange rates and stock prices: Evidence from developed and emerging Asian markets. International Review of Economics & Finance, 29, 1-11.
Müller, V. O. (2014). The impact of IFRS adoption on the quality of consolidated financial reporting. Procedia-Social and Behavioral Sciences, 109, 976-982.
Tillmann, P. (2016). Unconventional monetary policy and the spillovers to emerging markets. Journal of International Money and Finance, 66, 136-156.

Free Membership to World’s Largest Sample Bank

To View this & another 50000+ free samples. Please put
your valid email id.


Yes, alert me for offers and important updates


Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

UploadUnique Document

DocumentUnder Evaluation

Get Moneyinto Your Wallet

Total 5 pages


*The content must not be available online or in our existing Database to qualify as

Cite This Work
To export a reference to this article please select a referencing stye below:


My Assignment Help. (2021). Business. Retrieved from

“Business.” My Assignment Help, 2021,

My Assignment Help (2021) Business [Online]. Available from:[Accessed 19 December 2021].

My Assignment Help. ‘Business’ (My Assignment Help, 2021) accessed 19 December 2021.

My Assignment Help. Business [Internet]. My Assignment Help. 2021 [cited 19 December 2021]. Available from:

.close{position: absolute;right: 5px;z-index: 999;opacity: 1;color: #ff8b00;}


Thank you for your interest
The respective sample has been mail to your register email id


$20 Credited
successfully in your wallet.
* $5 to be used on order value more than $50. Valid for
only 1

Account created successfully!
We have sent login details on your registered email.



At, we understand that when students get stuck with tough assignments, they look for affordable services. To assist students with complex assignments, we have built a team of skilled cheap essay writers. has become one stop solution for all students who often look for answers related to their search similar to do my essay at the cheap rate or who can write my essay at affordable prices. Students prefer hiring us as we have the best provisions to render services related to do my essay online at a reasonable rate.

Latest Business Law Samples

div#loaddata .card img {max-width: 100%;

BU1112 Business Law
Download :
0 | Pages :

Course Code: BU1112
University: James Cook University is not sponsored or endorsed by this college or university

Country: Australia

Part A
Whether Stella is considered as an employee of PRX?
The main difference between employee and independent contractor is stated below:
Employee entered into contract of service, but contractor entered into contract for services.
Employer exercise control over the employee but no control was exercised by employer on contractor. It is considered as traditional test which was developed in Zuijs v Wirth Bros(Zuijs…
Australia South Lake Management health finance management  University of New South Wales 

BSBWHS605 Develop Implement And Maintain WHS Management Systems
Download :
0 | Pages :

Course Code: BSBWHS605
University: Swinburne University Of Technology is not sponsored or endorsed by this college or university

Country: Australia

Work Health and Safety Management System (WHSMS) is a collection of plans, tools, activities and processes. List 3 of these plans, tools, activities or processes and explain what they are,
The means, nitty gritty beneath, can be utilized whether the arranging procedure is straightforward or complex. They are:
Evaluating the current word related to wellbeing and security status including the ‘administration framework’ Lussier, R. N…
Australia Brisbane Management Work Health and Safety Management System (WHSMS University of Brisbane MBA 

BUSN331 Business Law
Download :
0 | Pages :

Course Code: BUSN331
University: Centennial College is not sponsored or endorsed by this college or university

Country: Canada

In Alberta, the Residential Tenancies Act applies to all the people in this jurisdiction, who rent their space out (Alberta Queen’s Printer, 2016). Through this act, the rights and responsibilities of the landlords and tenants are brought forward (Landlord and Tenant, 2015).
Question 1
Before a tenant can move in the rented accommodation, the tenant and the landlord have to reach an agreement, with regards to the…
Australia Edmonton Humanities Management University of New South Wales Masters in Business Administration 

LA1040 Contract Law
Download :
0 | Pages :

Course Code: LA1040
University: University Of London is not sponsored or endorsed by this college or university

Country: United Kingdom

A contract is an agreement between the parties which is enforceable legally in the courts. There are several provisions of law which governs how the terms related to the contract would operate. A contract consists of a set of provisions which are known as contractual terms. The weightage of such terms are not equal as one term may have a more significant consequence as compared to the other in relation to their brea…
United Kingdom London Economics Management University of London 

TLAW202 Corporations Law
Download :
0 | Pages :

Course Code: TLAW202
University: Top Education Institute is not sponsored or endorsed by this college or university

Country: Australia

If any person wants to carry out his business in the form of a company, then, it is necessary that the registration or incorporation requirements of such country must be met. In Australia, the Corporation Act 2001 and the guidelines laid down by ASIC provides with the steps that must be accomplish in order to establish a corporate entity.  (Malbon & Bishop, 2006).
A company is of great significance as it is treated as a …


Need an essay written specifically to meet your requirements?

Choose skilled experts on your subject and get an original paper within your deadline

156 experts online

Your time is important. Let us write you an essay from scratch

Tips and Tricks from our Blog