SECTION A - Answer any two questions from this section. 

QUESTION ONE 

Younger Plc is a registered aluminium smelting company operating in Italy and the following financial statements relate to the company’s financial year ended 31st January 2020. 

Additional information: 

(1) On 1 February 2019, Senior Plc, a UK company, acquired all the issued shares in Younger plc, a company incorporated in Italy.

(2) Younger Plc’s retained earnings as at 1 February 2019 and 31 January 2020 were €300,000 and €600,000 respectively.

(3) Exchange rates for the year ending 31 January 2020 were as follows: 

1 February 2019 €1.00 = £2.00

31 January 2020         €1.00 = £2.20

Average rate for year €1.00 = £2.15

(4) The accounts are stated in €, which is Younger plc’s functional currency.

REQUIRED:

(a) Translate the financial statements of Younger Plc from the functional currency to the presentation currency of Senior Plc.

(b) Identify the rates you will use to translate the following items to functional currency under the temporal method according to IAS 21:

(i) Monetary assets

(ii) Property, plant and equipment

(iii) Monetary liabilities

(iv) Ordinary share capital

(v) Tax expense

(vi) Revenue

(vii) Administration expenses