Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 10, Problem 1Q
To determine
Explain two major issues related with translation of foreign currency financial statements.
Expert Solution & Answer
Explanation of Solution
Two major issues related with translation of foreign currency financial statements are:
- 1) In each of the financial statement exchange rate need to be used for translating, the major issue is choosing the method. It is mainly related to exchange rate as which method to choose (historical, current period average or current period) for translating the balances of foreign currency.
- 2) In consolidated financial statements where to show or report the translation adjustments. It is mainly relate to know whether a translation adjustment is treated as loss or gain in income.
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