Chapter 12, Problem 12.12Q

To determine

Introduction:Translation adjustment is the most common method used and is applied when the local currency is the foreign entity’s functional currency. The subsidiary statement must be translated from its local currency to the parents’ functional currency. To translate the financial statements, the company will use the current rate, which is the exchange rate on balance sheet date, to convert the local currency.

The accounting treatment and disclosure of translation adjustments, when does it has debit balance or credit balance.