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Presentation of The Philippine Public Sector Accounting Standards (Ppsas)
Presentation of The Philippine Public Sector Accounting Standards (Ppsas)
of the
Philippine Public Sector
Accounting Standards
(PPSAS)
LEARNING OBJECTIVE
At the end of the session, you shall be able to
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
Effects of Changes in Foreign Exchange Rates
DEFINITIONS
PPSAS 4
Effects of Changes in Foreign Exchange Rates
DEFINITIONS
Closing rate - Closing rate is the spot
exchange rate at the reporting date.
DEFINITIONS
Exchange rate - is the ratio of
exchange for two currencies.
Spot exchange rate is the exchange
rate for immediate delivery.
PPSAS 4
Effects of Changes in Foreign Exchange Rates
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PPSAS 4
Effects of Changes in Foreign Exchange Rates
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
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PPSAS 4
Effects of Changes in Foreign Exchange Rates
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PPSAS 4
Effects of Changes in Foreign Exchange Rates
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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)
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Effects of Changes in Foreign Exchange Rates
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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
Effects of Changes in Foreign Exchange Rates
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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.
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Effects of Changes in Foreign Exchange Rates
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PPSAS 4
Effects of Changes in Foreign Exchange Rates
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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
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Effects of Changes in Foreign Exchange Rates
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ILLUSTRATIVE ENTRIES
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Effects of Changes in Foreign Exchange Rates
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ILLUSTRATIVE ENTRIES
Accounting Entry at initial recognition:
March 1, 2014
Cash in Bank Foreign Currency,
Savings Account
44,300
Subsidy from NG
44,300
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Effects of Changes in Foreign Exchange Rates
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ILLUSTRATIVE ENTRIES
Transfer to local currency bank account on May 30, 2014
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Effects of Changes in Foreign Exchange Rates
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EFFECTIVITY
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Effects of Changes in Foreign Exchange Rates
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Question???
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Effects of Changes in Foreign Exchange Rates
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Explain
the initial recognition of foreign
exchange transaction.
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Effects of Changes in Foreign Exchange Rates
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Explain
the subsequent reporting date
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Effects of Changes in Foreign Exchange Rates
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Effects of Changes in Foreign Exchange Rates
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THANK YOU!
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Effects of Changes in Foreign Exchange Rates
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