Answered: Identify the particular accounting…

Identify the particular accounting challenges that arise when a foreign subsidiary is consolidated with its parent company's activities in the United States.

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Chapter8: Subprime Lending Fiasco-ethics Issues

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Problem 3.12EC

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

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Recognize the particular accounting challenges connected with combining a foreign subsidiary's activities with those of its parent business in the United States.
Identify the unique accounting issues associated with consolidating a foreign subsidiary with the operations of its U.S. parent company.
How does a parent company determine the appropriate method for translating the financial statements of a foreign subsidiary?
Do all transactions by U.S. companies with foreign parties require special accounting procedures by the U.S. companies? Explain.
This question is related to (International Accounting) course. Critically discuss the issues associated with the calculation of profit of a foreign subsidiary.
Choose the correct. Which of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements. c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.
From an accounting perspective, what effect does corporate inversion have on the financial statements and operations of the U.S. company that has relocated its legal domicile to a lower-tax country?
Which of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements.c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.
What are the acceptable methods of accounting for business operations in a foreign country? Choose a publicly-traded company that operates internationally and identify the impact that the foreign operations have on the financial statements. Explain.
Why is it so difficult to estimate the value of retained profits when translating the financial statements of a foreign subsidiary? Normally, how is this issue resolved?
The two methods for the translation of foreign subsidiary financial statements are the current rate and temporal methods. Briefly, describe how each of these methods translates the foreign subsidiary financial statements into the parent company's consolidated statements. Identify when each technique should be used and the major advantage(s) of each.
What information about revenues by geographic area should a company present?a. Disclose separately the amount of sales to unaffiliated customers and the amount of intra-entity sales between geographic areas.b. Disclose as a combined amount sales to unaffiliated customers and intra-entity sales between geographic areas.c. Disclose separately the amount of sales to unaffiliated customers but not the amount of intra-entity sales between geographic areas.d. No disclosure of revenues from foreign operations need be reported.