Question: Subject: Advanced corporate reporting Topic: MFRS 121 Foreign Currency Question Lyme plc trades in Europe. At 31st October 2019 they were owed 50m by a

Subject: Advanced corporate reporting

Topic: MFRS 121 Foreign Currency

Question

Lyme plc trades in Europe. At 31st October 2019 they were owed 50m by a customer. This was included in current assets at 1.25 = 1, the rate ruling at the date the transaction took place. The rate at 31st October 2019 was 1.15 = 1. The customer paid on 4 December 2019 when the exchange rate was 1.20 = 1.

Making reference to MFRS 121 explain how this change in the exchange rate for the Euro would be reflected in Lymes statement of financial position as at 31 October 2019 and its Statements of comprehensive income for the years ended 31 October 2019 and 4 December 2019.

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