Foreign Exchange (ForEx) Flashcards
What is a company’s functional currency?
The currency of the primary economic environment in which it operates
In accounting, the term translation refers to
A procedure to prepare a foreign subsidiary’s financial statements for consolidation
For a foreign subsidiary that uses the US dollar as its functional currency, what translation method is required?
Current Rate Method
According to PAS 21, which method is usually required for translating a foreign subsidiary’s financial statements into the parent’s reporting currency?
The current rate method
Which accounts are remeasured using current exchange rates?
a. All revenues and expenses
c. All monetary assets and liabilities
b. All assets and liabilities
d. All current assets and liabilities
Current Exchange Rates means reporting date rates or end of date rates
All monetary assets and liabilities
The translation adjustment from translating a foreign subsidiary’s financial statements should be shown as
A component of stockholders’ equity on the consolidated balance sheet