On 1 February 2007, the directors of AZG decided to enter into a forward foreign exchange contract
Question:
Relevant exchange rates were as follows:
1 February 2007 $1=3 florins 31 March 2007 $1 = 2.9 florins 31 March 2008 $1 = 2.8 florins
Required:
(a) Identify the three characteristics of a derivative financial instrument as defined in IAS 39, Financial Instruments: Recognition and Measurement.
(b) Describe the requirements of IAS 39 in respect of the recognition and measurement of derivative financial instruments.
(c) Prepare relevant extracts from AZG's income statement and balance sheet to reflect the forward foreign exchange contract at 31 March 2008, with comparatives. (Note: ignore discounting when measuring the derivative).
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a The three characteristics are i Its value changes in response to the change in a specifi...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
65+ Reviews
86+ Question Solved
Related Book For 
International Financial Reporting and Analysis
ISBN: 978-1408075012
5th edition
Authors: David Alexander, Anne Britton, Ann Jorissen
Question Posted:
