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Concept explainers
Concept introduction:
Foreign currency translation:
It is the process of conversion of foreign entity’s functional currency financial statements to the reporting entity’s financial statements. This is a key part of financial statements consolidation process. The translation can be done using the following steps:
- Determination of functional currency of foreign entity
- Remeasure financial statements of foreign entity into reporting currency of parent company
- Record gains or losses on the translation of currencies
Requirement 1:
Identify financial statement where company reports adjustment for foreign currency translation for subsidiaries and use of U.S. dollar as their functional currency.
Concept introduction:
Foreign currency translation:
It is the process of conversion of foreign entity’s functional currency financial statements to the reporting entity’s financial statements. This is a key part of financial statements consolidation process. The translation can be done using the following steps:
- Determination of functional currency of foreign entity
- Remeasure financial statements of foreign entity into reporting currency of parent company
- Record gains or losses on the translation of currencies
Requirement 2:
Exchange rate for translation into U.S, dollars of the following:
- Cash
- Sales revenue
- Property, plant and equipment
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Chapter 8 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
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