You are the technical accounting consultant of a professional accounting firm. One of your clients is an
Question:
You are the technical accounting consultant of a professional accounting firm. One of your clients is an Australian travel company that arranges package tours to overseas destinations. The client states: ‘When we arrange accommodation in foreign hotels we recognise a liability at the spot rate. Then when we pay for the accommodation any exchange gain or loss is included in the profit or loss. We believe that we are complying with AASB 121/IAS 21’.
Required
Do you agree with the client’s position? Explain why.
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A travel agent is likely to make foreign exchange gains or losses on foreign currency transactions b...View the full answer
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ISBN: 9780730396413
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Authors: Janice Loftus, Ken Leo, Sorin Daniliuc, Belinda Luke, Hong Nee Ang, Mike Bradbury, Dean Hanlon, Noel Boys, Karyn Byrnes
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