Foreign Currency Translation

Question 1

Info

Answer 1

Started on 02 September2014 @4.75 PM
Total questions 22
To do at a time 22
Practice session 95 or So

Question 2

A subsidiary’s functional currency is the local currency, which has not experienced significant inflation. The appropriate exchange rate for translating the depreciation on plant assets in the income statement of the foreign subsidiary is the

Answer 2

Weighted-average exchange rate for the current year.
Depreciation provides benefit throughout the year.
ASC Topic 830 specifies that when the functional currency is the foreign currency, exchange rates for expenses should be those in effect at the time transactions are recorded during the current period. However, the statement also says that weighted-average rates can be used for items occurring numerous times during the accounting period. Such weighted-average rates may also be used for accounting allocations such as depreciation.

Question 3

Hint

Answer 3

When remeasuring, the current rate is used for monetary items and for nonmonetary items carried at market. The historical rate is to be used for nonmonetary items carried at cost.

Question 4

Inventory valuation on Dec. 31 what rate to use.

Answer 4

Rate on Dec. 31

Question 5

For IFRS reporting, the functional currency is

Answer 5

The currency in which the company primarily operates.

Question 6

Hint

Answer 6

Such gains are not unusual and should be recognized.

Question 7

For IFRS reporting purposes, currencies are defined as

Answer 7

Foreign, functional, and presentation.