ADV.FIN.ACCT.LL W/CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266380570
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 12.1.6E
To determine
Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.
Re-measurement: It is process to measure the financial results of any other currency into functional currency.
To choose: The correct option.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please answer it if is TRUE or FALSE.
A direct exchange quotation is one in which the exchange rate is quoted
O a.
For the immediate delivery of currencies exchanged
O b. For the future delivery of currencies exchanged
O c. In terms of how many units of the domestic currency can be converted into one unit of foreign
currency
O d.
In terms of how many units of the foreign currency can be converted into one unit of domestic
currency
In accordance with U.S. generally accepted accounting principles, which translation combination is appropriate for a foreign operation whose functional currency is the U.S. dollar? Choose the correct option.
Method
Treatmemt of transition adjustment
a.
Current rate
other comprehensive income
b.
Current rate
Gain or loss in net income
c.
Temporal
other comprehensive income
d.
Temporal
Gain or loss in net income
Chapter 12 Solutions
ADV.FIN.ACCT.LL W/CONNECT+PROCTORIO PLUS
Ch. 12 - Prob. 12.1QCh. 12 - Prob. 12.2QCh. 12 - Prob. 12.3QCh. 12 - How widely used are IFRS? Can IFRS be used for...Ch. 12 - Prob. 12.5QCh. 12 - Prob. 12.6QCh. 12 - Prob. 12.7QCh. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Prob. 12.13QCh. 12 - Prob. 12.14QCh. 12 - Prob. 12.15QCh. 12 - Prob. 12.16QCh. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - Prob. 12.20QCh. 12 - Prob. 12.4CCh. 12 - Prob. 12.5CCh. 12 - Prob. 12.6CCh. 12 - Prob. 12.7CCh. 12 - Prob. 12.1.1ECh. 12 - Prob. 12.1.2ECh. 12 - Prob. 12.1.3ECh. 12 - Prob. 12.1.4ECh. 12 - Prob. 12.1.5ECh. 12 - Prob. 12.1.6ECh. 12 - Prob. 12.1.7ECh. 12 - Prob. 12.2.1ECh. 12 - Prob. 12.2.2ECh. 12 - Prob. 12.2.3ECh. 12 - Prob. 12.2.4ECh. 12 - Prob. 12.2.5ECh. 12 - Prob. 12.2.6ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4.1ECh. 12 - Prob. 12.4.2ECh. 12 - Prob. 12.4.3ECh. 12 - Prob. 12.4.4ECh. 12 - Prob. 12.4.5ECh. 12 - Prob. 12.4.6ECh. 12 - Prob. 12.4.7ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16PCh. 12 - Prob. 12.17PCh. 12 - Prob. 12.18PCh. 12 - Prob. 12.19PCh. 12 - Remeasurement Gain or Loss Refer to the...Ch. 12 - Prob. 12.21PCh. 12 - Remeasurement and Proof of Remeasurement Gain or...Ch. 12 - Translation Palermo Inc. purchased 80 percent of...Ch. 12 - Prob. 12.24PCh. 12 - Prob. 12.25PCh. 12 - Prob. 12.26PCh. 12 - Prob. 12.27PCh. 12 - Prob. 12.28PCh. 12 - Prob. 12.29PCh. 12 - Prob. 12.30PCh. 12 - Prob. 12.31PCh. 12 - Prob. 12.32PCh. 12 - Prob. 12.33P
Knowledge Booster
Similar questions
- In which of the following cases in a translation adjustment necessary? Notes to financial statements are converted from one currency to another Preparation of consolidated financial statements Hedging of foreign currency Foreign currency financial statements are converted to another currencyarrow_forward22.Examples of external reporting issues include the following except:Select one:a. Should accounts of foreign operations be translated to parent currency when consolidated statements are prepared?b. Which exchange rates should be employed when translating from one currency to another?c. Does translation from one set of measurement rules to another change the information content of the original message?d. Should foreign managers be evaluated in terms of parent currency or the local currency of the country in which the manager operates?arrow_forwardIn SFAS No. 52 (see FASB ASC 830), the FASB adopted standards for financial reporting of foreign currency exchanges. This release adopts the functional currency approach to foreign currency translation. Required: A. Discuss the functional currency approach to foreign currency translation. B. Discuss the terms translation and remeasurement as they relate to foreign currency translation.arrow_forward
- Question 7 Which of the following statements relating to foreign currency translation is false? The current rate method is used when a foreign operation has its own functional currency and it is necessary to translate amounts from the functional currency to the reporting currency used in the parent entity's consolidated financial statements. The application of the current rate method gives rise to cumulative translation adjustments which are reported as part of other comprehensive income. If a foreign entity has a recording currency that is different than its functional currency, it will be necessary to restate the enity's financial statements from the recording currency to the applicable functional currency and this will give rise to restate gains and losses recognized in the income statement. A foreign entity that operates in a country that has a high rate of inflation will have to translate its financial statements into the parent entity's…arrow_forward45 In presenting foreign currency denominated transactions to the functional currency of the entity, which of the following statements is correct? Group of answer choices When nonmonetary items are translated from foreign currency to functional currency in the financial statements, foreign currency gain of loss will be recognized. Monetary items shall be initially recognized and measured at the exchange rate prevailing at the end of the reporting period. Foreign currency denominated income statement accounts shall be translated using the exchange rate at the date of transaction. Foreign currency gain or loss arising from translation of the foreign currency denominated items to functional currency shall be presented in other comprehensive income with reclassification adjustment to profit or loss if realized.arrow_forwardExplain 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 Currencyarrow_forward
- Section 2 Consider the information in Unit two material and using your own research on the situation in your own country (or any other Caribbean country of your choice), answer the following questions:a) In your opinion, which two factors affecting exchange rates, has the most impact in your, or your chosen, jurisdiction? b) Does the most important factor influencing exchange rates in your country differ from those that may apply in larger economies?arrow_forwardThe factors used to convert from one country's currency to another country's currency is called Select one: a. Strike price b. Exchange rate c. Cost of capital d. Price translation Next pa Previous pagearrow_forwardA). 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?arrow_forward
- 1. Which of the following statements is incorrect? * A. A foreign operation (e.g., a branch) that is essentially an extension of the entity (e.g., the home office) would have the same functional currency as that of the entity. B. An entity can only have one functional currency but it can have as many presentation currencies as it wishes. C. Subsequent to initial recognition, both monetary and non-monetary items arising from a foreign currency transaction are translated at the closing rate. D. A foreign currency transaction is initially recognized at the spot exchange rate at the date of the transaction. 2. According to PAS 21, exchange differences arising from the translation of monetary items arising from foreign currency transactions are recognized in * A. Directly in equity B. Any of these C. Other comprehensive income D. Profit or lossarrow_forwardExamples of external reporting issues include the following except: Select one: O a. Should accounts of foreign operations be translated to parent currency when consolidated statements are prepared? O b. Which exchange rates should be employed when translating from one currency to another? c. Should foreign managers be evaluated in terms of parent currency or the local currency of the country in which the manager operates? O d. Does translation from one set of measurement rules to another change the information content of the original message?arrow_forwardIf the U.S.DOLLAR is determined to be the functional currency, which of the following is usually used to restate to US$ monetary assets and liabilities to the reporting currency? I. The average exchange rate II. The historical exchange rate III. The current exchange rate A) III only. B) Either Il or III, depending on the nature of the item. C) I only. D) II only.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage