F2 Flashcards
1
Q
Difference between remeasurement and translation for reporting under different foreign currencies.
A
Remeasurement- when the sub’s functional currency is not its home currency-reported in current income
Translation-when the sub’s functional currency is not the PARENT’s currency, gain/losses reported in other comprehensive income
2
Q
What is a transaction gain and how is it reported?
A
It is a gain from a parent company’s operations resulting from the change in foreign currency spot rates.
3
Q
How do you record an exchange lacking commercial substance?
A
- No change in cash flows or FV can’t be determined
- don’t record G/L if boot is less than 25% of consideration , otherwise it is a monetary transaction and G/L are cognized
- *BOOT is based on FV not NBV
