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On April,, Aurea FZ acquired the assets and liabilities of a French business. The acquired business was immediately incorporated in a new company called Aurea SAS. The local team has submitted a trial balance in EUR for the period April to June,.
You have been asked to prepare USD balance sheets of Aurea SAS at April and June,.
Which of the exchange rates would be considered to prepare balance sheets and why
1. EUR/USD spot exchange rate on purchase date 1.7
2. EUR/USD rate on April, 1.
3. EUR/USD rate on June, 1.
4. EUR/USD average rate May 1.
5. EUR/USD average rate June 1.
option no 1 is the correct answer
EUR/USD rate on April 1 and EUR/USD rate on June 1.
The assets and liabilities shown in the foreign operation's statement of financial position are translated at the closing rate at the year end or month, regardless of the date on which those items originated.
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3. EUR/USD rate on June, 1.
1. EUR/USD spot exchange rate on purchase date 1.7
