Entity D made a one-off sale to a customer in Europe on 1 November 2020. The...
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Entity D made a one-off sale to a customer in Europe on 1 November 2020. The sale was for €332,000 and a 92-day credit period was given to the customer. The contract with this customer has a single performance obligation and satisfied on 1 November 2021. On the same date, Entity D entered into a forward contract with a bank to sell €332,000 at £272,240, to be settled net in cash on 31 January 2021. Entity D designated the collectable as the hedged item and the forward contract as the hedging instrument. No accounting entries have been made pertaining to the two transactions for the period ended 31 December 2020. Entity D's functional currency is £. The spot exchange rates are as follows: 1 November 2020 31 December 2020 €1 = £0.83 €1 = £0.79 %3D Discuss the accounting treatment for the above transactions in the financial statements of Entity D the period ending 31 December 2020, in accordance with the relevant IFRS(s). Entity D made a one-off sale to a customer in Europe on 1 November 2020. The sale was for €332,000 and a 92-day credit period was given to the customer. The contract with this customer has a single performance obligation and satisfied on 1 November 2021. On the same date, Entity D entered into a forward contract with a bank to sell €332,000 at £272,240, to be settled net in cash on 31 January 2021. Entity D designated the collectable as the hedged item and the forward contract as the hedging instrument. No accounting entries have been made pertaining to the two transactions for the period ended 31 December 2020. Entity D's functional currency is £. The spot exchange rates are as follows: 1 November 2020 31 December 2020 €1 = £0.83 €1 = £0.79 %3D Discuss the accounting treatment for the above transactions in the financial statements of Entity D the period ending 31 December 2020, in accordance with the relevant IFRS(s).
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Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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