
a
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
To ascertain:The preparation of a schedule translating the December 31, 20X4
b
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. Any translation adjustment that occurs is a component of comprehensive income. The method used to translate financial statement from the local currency to functional currency is called current rate method.
The preparation of a schedule calculating the translation adjustment as on 20X4. The net assets on January 1, 20X4 were BRL280, 000.

Want to see the full answer?
Check out a sample textbook solution
Chapter 12 Solutions
Advanced Financial Accounting
- Please provide correct answer this financial accounting questionarrow_forwardAnswer ? Financial Accountingarrow_forwardChanging the method of valuing inventory ignores the principle of ________. A. Lower of cost or market B. Specific identification C. Consistency D. Ending inventory comes from the most recent purchasesarrow_forward
- Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningAccounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning

