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NEW QUESTION: 1
CD acquired 100% of the equity share capital of FG for cash consideration of Kr1,200,000 on 1 January
20X7.
Retained earnings of FG at the date of acquisition was Kr800,000. CD operates from Country A and its functional and presentation currency is $. FG is located and trades throughout Country B and its functional currency is the Krona (Kr).
CD has no other subsidiaries. Goodwill had not suffered any impairment to date.
Summarised data from the statements of financial position for both entities at 31 December 20X7 is presented below:

Which of the following is the correct application of IAS 21 The Effects of Changes in Foreign Exchange Rates in translating FG's statement of financial position into the presentation currency of CD for consolidation purposes at 31 December 20X7?
A. * Monetary assets and liabilities at historic rate.
* Non monetary assets and liabilities at closing rate.
B. * Goodwill at closing rate.
* Assets and liabilities at closing rate.
C. * Goodwill at historic rate.
* Assets and liabilities at closing rate.
D. * Monetary assets and liabilities at closing rate.
* Non monetary assets and liabilities at historic rate.
Answer: B

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