In which of the following cases in a translation adjustment necessary? Notes to financial statements are converted from one currency to another Preparation of consolidated financial statements Hedging of foreign currency Foreign currency financial statements are converted to another currency

In which of the following cases in a translation adjustment necessary? Notes to financial statements are converted from one currency to another Preparation of consolidated financial statements Hedging of foreign currency Foreign currency financial statements are converted to another currency

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 14QE

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Question

In which of the following cases in a translation adjustment necessary?
Notes to financial statements are converted from one currency to another
Preparation of consolidated financial statements
Hedging of foreign currency
Foreign currency financial statements are converted to another currency

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Forex difference arising from translating foreign currency denominated transactions to functional currency shall be recognized in Group of answer choices Other comprehensive income with classification adjustment Other comprehensive income without reclassification adjustment Retained earnings Profit and loss
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.
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 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.
In accordance with U.S. generally accepted accounting principles, which translation combination is appropriate for a foreign operation whose functional currency is the U.S. dollar? Choose the correct option. Method Treatmemt of transition adjustment a. Current rate other comprehensive income b. Current rate Gain or loss in net income c. Temporal other comprehensive income d. Temporal Gain or loss in net income
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 revenue
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?
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.
Which translation method results in a set of financial statements as if the foreign subsidiary’s transactions were carried out in US dollars? Current rate method Temporal method
How should exchange gains or losses resulting from foreign currency transactions be accounted for? Included as component of income from continuing operations for the period in which the rate changes. Included as component of other comprehensive income for the period in which the rate changes. Included in the statement of financial position as a deferred item. Included in net earnings for gains, but deferred for losses.
Explain the rule for translating the Financial Statements of Foreign Operations from Local Currency to Functional Currency. Explain the rule for translating the Financial Statements of Foreign Operations from Functional Currency to Presentation Currency
45 In presenting foreign currency denominated transactions to the functional currency of the entity, which of the following statements is correct? 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.