Read and T for True and F for False of the following phrases 1-in translating the financial statements of the subsidiary the parent company s currency using the temporal method the accumulated translation adjustment account appears to use and is the decisive one for calculating the net assets of the subsidiary .
Read and T for True and F for False of the following phrases
1-in translating the financial statements of the subsidiary the parent company s currency using the temporal method the accumulated translation adjustment account appears to use and is the decisive one for calculating the net assets of the subsidiary .
Definition:
Parent company: When an investor company holds above 50% in the outstanding stock of the investee company, then the investor is said to have control over investee. The investor company is known as the parent company.
Identify whether the given statement is correct or not.
The need for an accumulated translation adjustment account arises to recognize the gain or loss, the company has incurred while converting the currency of financial statements of subsidiary company to the parent company. Investors are made available the information of gain or loss, the company has obtained through accumulated translation adjustment account. This account appears in the translated balance sheets section of comprehensive income.
To present the gain or loss which is not the part of business operations is the purpose of accumulated translation adjustment account.
From the above explanation, it is clear the given statement is false.
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