Question: (a) Explain presentation and functional currency. [5 marks] (b) A Ringgit Malaysia-based company, Kipas Berhad, set up a foreign subsidiary on 30 June 2018. Kipas

(a) Explain presentation and functional currency. [5 marks]

(b) A Ringgit Malaysia-based company, Kipas Berhad, set up a foreign subsidiary on 30 June 2018. Kipas Berhad subscribed 24 000 for share capital when the exchange rate was 2 = RM1. The subsidiary, Fan Inc, borrowed 72 000 and bought a non-monetary asset for 96 000. Kipas Berhad prepared its financial statements on 31 December 2018 and by that time the exchange rate had moved to 3 = RM1.

Required:-

Prepare Fan Inc's statement of financial position at 31 December 2018 in both euros and Ringgit Malaysia (RM), and calculate the exchange gain or loss arising since 30 June 2018. [11 marks]

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