Case: Pallavi Ltd has a foreign branch whose operations are integral to those of the head office. When translating the branch trial balance under AS 11, fixed assets of the branch are translated at:

Correct answer: D) The exchange rate on the date of acquisition of the fixed assets

Explanation

For an integral foreign operation, AS 11 requires translation as if the transactions had been carried out by the reporting enterprise itself. Non-monetary items carried at historical cost, such as fixed assets, are translated at the exchange rate on the date of the transaction (acquisition), and depreciation is translated at the same rate.