Polly Packaging Part 2
Polly Packaging Part 2
Topic covered: IAS 21 The Effects of Changes in Foreign Exchange Rates
(specifically, foreign currency translation)

Note: it is not necessary to purchase the question "Polly Packaging" in order to benefit from this Part 2 question.

Date prepared/updated: July 2011

Question length: 4 pages
Solution length: 6 pages

Convert the Dutch Subsidiary’s balance sheet and statement of comprehensive income from its functional currency to the presentation currency. Prepare a statement of changes in equity for the year ended December 31, 20X2 (in the presentation currency). Include all related calculations including a proof of the change in the cumulative exchange differences balance from 20X1 to 20X2 (i.e. the foreign exchange amount included in other comprehensive income for the year). Foreign exchange rates that may be relevant are included in Appendix C.

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