Exam 10: Foreign Currency Transactions and Translation

IAS 21 and SFAS 52 have the one transaction perspective.

In the current rate method the assets are translated at market on the balance sheet date.

If a parent company has a subsidiary in a country where the cumulative rate of inflation for the past three years is around 100 percent, which translation methodology would they use under FASB Statement No. 52?

According to IAS 21,

The local currency is

From the standpoint of the parent company, a foreign currency is

According to the temporal method of translation,

The process by which one currency is changed into another is known as

According to FASB Statement No. 52, which of the following does not have to be disclosed?

If a parent company has a subsidiary in a country where the cumulative rate of inflation for the past three years is around 100 percent, which translation methodology would they use according to the IASC?

Which foreign currency translation standard uses the following objective: "1) Provide information that is generally compatible with the expected economic effects of a rate change on an enterprise's cash flows and equity. 2) Reflect in consolidated statements the financial results and relationships of the individual consolidated entities as measured in their functional currencies in conformity with generally accepted accounting principles."

No foreign exchange accounting problem arises as long as the transactions are denominated in the firm's domestic currency.

The currency of the country where the foreign company is operating is the

If a U.S.-based company has a subsidiary in Germany, and the German subsidiary imports components from Britain, the British pound would most likely be considered (from the standpoint of the German subsidiary)

Outright forward transactions do not involve the exchange of currency three or more days after the date on which the traders agree to the transaction.