XYZ Corp, has carried out transactions denominated in foreign currency during the financial year ended 31 October 2019 and has conducted foreign operations through a foreign entity. Its functional and presentation currency is the US dollar. XYZ purchased inventory from a foreign supplier for Euros 8 million on 31 July 2019, the trade payable was still outstanding and the inventory were still held by XYZ Corp. XYZ Corp sold its products to a foreign customer for Euros 4 million on 31 July 2019 and received payment for the products in euros on 31 October 2019. Additionally, XYZ Corp purchase investment property on 1 November 2018 for Euros 28 million. At 31 October 2019, the investment property had a fair value of Euros 24 million. The company uses the fair value model in accounting for its investment properties. XYZ would like advice on how to treat this transactions in the financial statement for the year ended 31 October 2019.

Exchange rates

Date	Euro:$	Average rate for year to that date (Euro: $)
1 November 2017	1.1
31 October 2018	1.4	1.2
1 November 2018	1.4
31 July 2019	1.6
31 October 2019	1.3	1.5

Answer rating: 100% (QA)

Step 1 Introduction IAS 21 refers to Effects of changes in foreign currency rates This standard help... View the full answer