Hi All,
As of now I am activating my study material.
Last Activation:
I was activating a chapter, which I was struggling for a while last week. It was ICAI's Accounting Standard 11 i.e. Accounting Treatment for Foreign Exchange.
Activation sessions took :3
Session 1: 25 Minutes
My purpose had been a to understand what I need to show on the face of the balance sheet, and what are the components of the said standard.
I did a super-reading. Wrote down key terms. Then assembled them to my understanding. Most of them were the components, which were bold texts and other key terms.
Next I came up with my questions and found my answers.
Summary : Accounting Standard 11, needs the treatment of the Foreign currency transactions and operations, to be consistent with the comparability clause. Hence the Foreign transaction and operations are needed to be reported in the domicile currency of the reporting balance sheet country. At the appropriate exchange rates. And the treatment of excess
The Standard bifurcates operations into two parts, and their treatments accordingly. Integral and Non-integral foreign operation.
This is where I stopped the session, and felt like I got the most out of it.
Session 2: 30 Minutes
For this my purpose was, to know about the treatment of foreign operations and foreign forward contracts.
I did a preview, and then re-read what I did previously. Then started forming questions and went on answering these question. Then I created a mind-map. I have a habit of writing summary and drawing a mindmap, and then again writing some points.
During drawing mind-map, I was reading, and then drawing, and I was doing that I got understanding on how the Accounting Standard was structured.
As I ended the session, I had an urge to solve a case problem.
I had few questions, and tried to solve them, I made many mistakes, on certain core issues.
Session 3: 20 Minutes
This last session was done, after a two day gap.
I did a preview, and then I got Ahaa moments. These "ahaa" brought forward all those mistakes I made in solving. I didn't put forward any questions or purpose related to that. I just did a recap of what I studied.
Summary: The exchange rates which are needed to be taken for the reporting, are most vital part of the accounting standard. There are many exchange rates, such has Historical rate, transactional rate, estimation rate and closing rate. If an enterprise has no foreign operation and has only transactions, then transaction rates are used. For Integral Foreign Operation, Monetary items at closing rate, non-monetary at transaction rate or estimation rate. For non-integral, All at closing rate except for income and expenses.
The rest of the different is accumulated to Foreign currency transaction reserve.
So let me know anything that I can improve on. This is the only Accounting Standard which took 1hour plus. Earlier to this I have photoread 10, which took 30-45 minutes. I also have mind map of them, which always helps me to revise them at a glance and sets stages for the next standard.
