f the functional currency is determined to not be the foreign entity's local currency, translation is done using a. the current rate method b. the functional method c. the remeasurement method d. the derivative method
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If the functional currency is determined to not be the foreign entity's local currency, translation is done using
|
a. |
the current rate method |
|
b. |
the functional method |
|
c. |
the remeasurement method |
|
d. |
the derivative method |
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- which shall be recognized for each item when foreign currency gain or loss that arises from translation of foreign currency denominated transaction to functional currency? a. inventiry b. interest expense c. accounts receivable d. unearned revenueIn presenting foreign currency denominated transactions to the functional currency of the entity, which of the following statements is correct? a. When nonmonetary items are translated from foreign currency to functional currency in the financial statements, foreign currency gain of loss will be recognized. b. Monetary items shall be initially recognized and measured at the exchange rate prevailing at the end of the reporting period. c. Foreign currency gain or loss arising from translation of the foreign currency denominated items to functional currency shall be presented in other comprehensive income with reclassification adjustment to profit or loss if realized. d. Foreign currency denominated income statement accounts shall be translated using the exchange rate at the date of transaction.Describe the functional currency concept and briefly describe how a foreign entity’s functional currency Is determined.
- How to translate a foreign subsidiary’s financial statements into its parent’s reporting currency using the current rate method and calculate the related translation adjustment?In the translated financial statements, which method of translation maintains the underlying valuation methods used in preparing the foreign currency financial statements? Choose the correct.a. Current rate method; income statement translated at average exchange rate for the year.b. Current rate method; income statement translated at exchange rate at the balance sheet date.c. Temporal method.d. Monetary/nonmonetary method.In the translated financial statements, which method of translation maintains the underlying valuation methods used in preparing the foreign currency financial statements?a. Current rate method; income statement translated at average exchange rate for the year.b. Current rate method; income statement translated at exchange rate at the balance sheet date.c. Temporal method.d. Monetary/nonmonetary method.
- Choose the correct. In accounting for foreign currency transactions, which of the following approaches is used in the United States?a. One-transaction perspective; accrue foreign exchange gains and losses.b. One-transaction perspective; defer foreign exchange gains and losses.c. Two-transaction perspective; defer foreign exchange gains and losses.d. Two-transaction perspective; accrue foreign exchange gains and losses.Describe guidelines for determining when foreign currency financial statements are to be translated using the current rate method and when they are to be remeasured using the temporal method.what are implications for analysis of financial statements that result from the accounting for foreign currency translation?
- What is the initial measurement of foreign currency transaction? Closing rate for both monetary items and nonmonetary items. Historical rate for monetary items and closing rate for nonmonetary items Historical rate for both monetary item and nonmonetary items. Historical rate for nonmonetary items and closing rate for monetary items.On initial recognition of IFRS, a foreign currency transaction should be recorded at:A. the spot exchange rateB. Forward exchange rateC. Historical exchange rate D. All of the aboveE. None of the abovAssuming that the functional currency of a foreign subsidiary is the local currency, which of the following accounts would be translated at the current rate on the Balance Sheet date (B/S Rate)? a.Additional Paid-In Capital b.Cost of Goods Sold c.Retained Earnings d.Allowance for Doubtful Accounts
