Foreign Currency Transaction Gains and Losses

Question 1

Translation Rates to use

Answer 1

Assets current (spot ) rate
Labilities current (spot ) rate
Equity historical rate
Income statement items average rate

Question 2

The difference between remeasurement and translation.

Answer 2

Remeasurement gains or losses go to the income statement
Translation gains or losses go too=OCI
Going from functional currency to reporting currency, that is called translation

Question 3

Foreign transaction Gain/Loss

Answer 3

A foreign currency exchange gain occurs when exchange rate increase between the date of receivable is recorded and date of the date of the cash receipt. (We received more than the amount agreed)
On a payable gain when the exchange rate is less than the amount that we agreed to pay.
(The exchange rate is more or higher than the cash paid