Group of answer choices When nonmonetary items are translated from foreign currency to functional currency in the financial statements, foreign currency gain of loss will be recognized. Monetary items shall be initially recognized and measured at the exchange rate prevailing at the end of the reporting period. Foreign currency denominated income statement accounts shall be translated using the exchange rate at the date of transaction. 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.

Group of answer choices When nonmonetary items are translated from foreign currency to functional currency in the financial statements, foreign currency gain of loss will be recognized. Monetary items shall be initially recognized and measured at the exchange rate prevailing at the end of the reporting period. Foreign currency denominated income statement accounts shall be translated using the exchange rate at the date of transaction. 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.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter6: Government Influence On Exchange Rates

Section: Chapter Questions

Problem 25QA

See similar textbooks

Similar questions

31. How should exchange gains or losses resulting from foreign currency transactions be accounted for?a. Included as component of income from continuing operations for the period in which the ratechanges.b. Included as component of other comprehensive income for the period in which the rate changes.c. Included in the statement of financial position as a deferred item.d. Included in net earnings for gains, but deferred for losses. 32. When the information about two entities engaged in the same industry has been prepared and presented in similarmanner, the information exhibits the enhancing qualitative characteristics ofa. Relevanceb. Consistencyc. Faithful representationd. Comparability 33. What are the attributes that make the information provided in the financial statements useful to the readers?a. Qualitative characteristics of financial informationb. Quantitative characteristics of financial informationc. Elements of financial statementsd. Objectives of financial reporting 34.…
In relation to IAS 21 The Effects of Changes in Foreign Exchange Rates, which of the following statements are true? (i) Exchange gains and losses arising on the retranslation of monetary items are recognised in other comprehensive income in the period. (ii) Non-monetary items measured at historical cost in a foreign currency are not retranslated at the reporting date. (iii) An intangible asset is a non-monetary item. A All of the above B (ii) and (iii) only C (i) and (iii) only D (i) and (ii) only
(A) On 1 March 20X1 an entity’s financial statements for the year ended 31 December 20X0 were authorised for issue. At 31 December 20X0 the entity had significant unhedged foreign currency exposures. By 1 March 20X1 a significant loss had been incurred on these exposures because of a material weakening of the entity’s functional currency against the foreign currencies to which it is exposed.Required: how this should be treated under IAS-10.
In 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.
Question 7 Which of the following statements relating to foreign currency translation is false? The current rate method is used when a foreign operation has its own functional currency and it is necessary to translate amounts from the functional currency to the reporting currency used in the parent entity's consolidated financial statements. The application of the current rate method gives rise to cumulative translation adjustments which are reported as part of other comprehensive income. If a foreign entity has a recording currency that is different than its functional currency, it will be necessary to restate the enity's financial statements from the recording currency to the applicable functional currency and this will give rise to restate gains and losses recognized in the income statement. A foreign entity that operates in a country that has a high rate of inflation will have to translate its financial statements into the parent entity's…
Assuming 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
Question 22 Which of the following statements relating to foreign currency translation and remeasurement is correct? If a foreign entity's recording currency is not it's functional currency, but the functional currency is the reporting currency, translation using the current rate method is not required. if a foreign entity's recording currency is not it's functional currency, remeasurement into the functional currency using the temporal method is required If a foreign entity operates in a highly inflationary economcy, the reporting currency of the U.S. parent-the U.S. dollar, should be used. All of these statements are correct
The effects of changes in foreign exchange rates states that where an entity has foreign operations, such as overseas subsidiaries, branches, joint ventures or associates, it should determine the functional currency of that foreign operation. MFRS 121 The Effects of Changes in Foreign Exchange Rates deals with this issue. Required:Explain the factors which should be taken into consideration in determining whether or not the functional currency of a foreign operation is the same as that of its parent.
22.Examples of external reporting issues include the following except:Select one:a. Should accounts of foreign operations be translated to parent currency when consolidated statements are prepared?b. Which exchange rates should be employed when translating from one currency to another?c. Does translation from one set of measurement rules to another change the information content of the original message?d. Should foreign managers be evaluated in terms of parent currency or the local currency of the country in which the manager operates?
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.
The question relates to either Chapter 9 ( Foreign Currency Translations and Hedging Foreign Exchange Risk ) or Chapter 10 ( Translation of Foreign Currency Financial Statements ) For Advanced Accounting 13th Edition by Joe B. Hoyle, Thomas F, Schaefer, and Timothy S. Doupnik. Details are included in the image Need all calculations, journal entries, work, etc.
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.