UNDER THE CURRENT RATE METHOD, THE FOREIGN CURRENCY TRANSLATION GAIN OR LOSS WILL APPEAR ON THE PARENT FIRM’S INCOME STATEMENT

Question

4. Analyst 1: Under the current rate method, the foreign currency translation gain or loss will appear on the parent firm’s income statement. Analyst 2: Under the temporal method, sales, COGS and depreciation are remeasured using the historical rate. A. Analyst 1 is correct. B. Analyst 2 is correct. C. Both analysts are incorrect. LOe: Calculate the translation effects and evaluate the translation of a subsidiary’s balance sheet and income statement into the parent company’s presentation currency.

Answer

4. Analyst 1: Under the current rate method, the foreign currency translation gain or loss will appear on the parent firm’s income statement. Analyst 2: Under the temporal method, sales, COGS and depreciation are remeasured using the historical rate. A. Analyst 1 is correct. B. Analyst 2 is correct. C. Both analysts are incorrect. LOe: Calculate the translation effects and evaluate the translation of a subsidiary’s balance sheet and income statement into the parent company’s presentation currency.

UNDER THE CURRENT RATE METHOD, THE FOREIGN CURRENCY TRANSLATION GAIN OR LOSS WILL APPEAR ON THE PARENT FIRM’S INCOME STATEMENT

Bạn đang xem 4. - CFA 2018 LEVEL 2 FRA QUESTION BANK MULTINATIONAL OPERATIONS QBANK