Presentation of The Philippine Public Sector Accounting Standards (Ppsas)

Presentation
of the
Philippine Public Sector
Accounting Standards
(PPSAS)
Philippine Public Sector Accounting Standards Board (PPSAcSB)
PPSAS 4 THE EFFECTS OF

CHANGES IN FOREIGN
EXCHANGE RATES
LEARNING OBJECTIVE
At the end of the session, you shall be able to
Determine the application of foreign

exchange rates in accordance with
PPSAS 4
PPSAS 4
Effects of Changes in Foreign Exchange Rates
DEFINITIONS
Foreign Currency Transactions are
transactions that are denominated
or requires settlement in a foreign
currency.
Functional currency is the currency
of
the
primary
economic
environment in which the entity
operates.
PPSAS 4
DEFINITIONS
Foreign Operation is an entity that is

controlled entity, associate, joint
venture, or branch of a reporting entity,
the activities of which are based or
conducted in a country or currency
other than those of the reporting entity.
PPSAS 4
DEFINITIONS
Closing rate - Closing rate is the spot
exchange rate at the reporting date.
Exchange difference - is the difference

resulting from translating a given number
of units of one currency into another
currency at different exchange rates.
PPSAS 4
DEFINITIONS
Exchange rate - is the ratio of
exchange for two currencies.
Spot exchange rate is the exchange
rate for immediate delivery.
PPSAS 4
10
PPSAS 4
DEFINITIONS
Monetary items are units of currency held
and assets and liabilities to be received or
paid in a fixed or determinable number of
units of currency.
Non-Monetary items - absence of a right to
receive (or an obligation to deliver) a

fixed or determinable number of units of
currency.
PPSAS 4
11
Accounting for Foreign

Currency Transactions
the reporting entity determines its functional
currency
the entity measures (translates) all foreign
currency items into its functional currency
the entity reports the effects of such
measurement (translation) and recognizes
exchange differences
PPSAS 4
13

Initial Recognition
at date of transaction, record using
the Spot exchange rate (Par. 24)
PPSAS 4
14
Reporting at Subsequent
Reporting Dates
At Subsequent Reporting Dates:
monetary closing rate at BS date
non-monetary HC rate at transaction date
non-monetary FV rate at date FV was
determined (Par. 27)
PPSAS 4
15
Recognition of Exchange Differences
Monetary Items:
from its settlement and translation surplus
or deficit in the period, (Par. 37)
except for:
monetary items included in the
reporting entitys net investment in foreign
operation separate component of net
asset/equity in the consolidated FS
PPSAS 4
16
Non-Monetary Items:
When a gain or loss on a non-monetary item is
recognized directly in net assets/equity, any
exchange component of that gain or loss shall be
recognized directly in net assets/equity.
PPSAS 4
17

Disclosures
The entity shall disclose:
(a)The amount of exchange differences
recognized in surplus or deficit, except
for
those
arising
on
financial
instruments measured at fair value
PPSAS 4
19

Disclosures
The entity shall disclose:
(b) Net exchange differences classified in
a
separate
component
of
net
assets/equity, and a reconciliation of
the amount of such exchange
differences at the beginning and end of
the period.
PPSAS 4
20
Exercise
Record the following:
Receipt of NCA amounting 1000 USD on
March 1, 2014 for working fund deposited
to agency dollar account. (Assume:
exchange rate is 1USD=P44.30)
Transfer of 1000 USD to local currency
bank account on May 30, 2014
PPSAS 4
21
ILLUSTRATIVE ENTRIES
PPSAS 4
21
Accounting Entry at initial recognition:
March 1, 2014
Cash in Bank Foreign Currency,
Savings Account
44,300
Subsidy from NG
44,300
PPSAS 4
22
Transfer to local currency bank account on May 30, 2014
Cash in Bank-Local Currency,

Current Account
43,900
Loss on Foreign Exchange
400
Cash in Bank-Foreign Currency,
Savings Account
44,300
PPSAS 4
23
EFFECTIVITY
An entity shall apply this PPSAS

for annual financial statements
covering periods beginning on
January 1, 2014
PPSAS 4
25
Question???
PPSAS 4
26
Explain
the initial recognition of foreign
exchange transaction.
PPSAS 4
27
Explain
the subsequent reporting date
PPSAS 4
28
What are the items to be disclosed

by the entity?
PPSAS 4
29
THANK YOU!
PPSAS 4
30

Presentation of The Philippine Public Sector Accounting Standards (Ppsas)

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Presentation of The Philippine Public Sector Accounting Standards (Ppsas)

Загружено:

Авторское право:

Доступные форматы

Presentation

Philippine Public Sector Accounting Standards Board (PPSAcSB)

PPSAS 4 THE EFFECTS OF

Determine the application of foreign

Foreign Operation is an entity that is

Exchange difference - is the difference

receive (or an obligation to deliver) a

Accounting for Foreign

Accounting for Foreign

Recognition of Exchange Differences

Accounting for Foreign

Accounting for Foreign

Cash in Bank-Local Currency,

An entity shall apply this PPSAS

What are the items to be disclosed

Вам также может понравиться