Tutor give me answer Whichcriterionestablishesfunctional currency in multi-nationaloperations?➤ Country of incorporationParent company currencyPrimary economic environmentTransaction volume basis

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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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Explain the concepts of Local Currency, Functional Currency and Presentation Currency with suitable examples Explain the rule for translating the Financial Statements of Foreign Operations from Local Currency to Functional Currency
What does the term functional currency mean? How is the functional currency determined under IFRS and under U.S. GAAP?
Define domestic currency
Which accounts are remeasured (versus translated) using current exchange rates? Select one: a. All current assets and liabilities b. All assets and liabilities All revenues and expenses d. Cash, receivables, and most liabilities e. All noncurrent assets and liabilities C.
what are implications for analysis of financial statements that result from the accounting for foreign currency translation?
Transaction versus Economic Exposure Compare and contrast transaction exposure and economic exposure. Why would an MNC consider examining only its “net” cash flows in each currency when assessing its transaction exposure?
The effects of changes in foreign exchange rates states that where an entity has foreign operations, such as overseas subsidiaries, branches, joint ventures or associates, it should determine the functional currency of that foreign operation. MFRS 121 The Effects of Changes in Foreign Exchange Rates deals with this issue. Required:Explain the factors which should be taken into consideration in determining whether or not the functional currency of a foreign operation is the same as that of its parent.
F. Accounting
A). Why do we need to translate the financial statement of foreign operations? B). Explain the concepts of local currency, functional currency and presentation, orrency with example. K C). How is the profit or loss from translating foreign operations' financial statements from local currency to functional currency treated? D) How are the profit and loss from translating foreign ope ions' financial statements from functional currency to presentation currency treated?
Determined primarily by?
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The system of using a monetary unit, such as the US dollar, to value the transaction is known as which of the following? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption

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Which criterion establishes functional currency in multi-national operations? ➤ Country of incorporation Parent company currency Primary economic environment Transaction volume basis