22. Examples of external reporting issues include the following except: Select one: a. Should accounts of foreign operations be translated to parent currency when consolidated statements are prepared? b. Which exchange rates should be employed when translating from one currency to another? c. Does translation from one set of measurement rules to another change the information content of the original message? d. Should foreign managers be evaluated in terms of parent currency or the local currency of the country in which the manager operates?

22. Examples of external reporting issues include the following except: Select one: a. Should accounts of foreign operations be translated to parent currency when consolidated statements are prepared? b. Which exchange rates should be employed when translating from one currency to another? c. Does translation from one set of measurement rules to another change the information content of the original message? d. Should foreign managers be evaluated in terms of parent currency or the local currency of the country in which the manager operates?

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 14QE

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Similar questions

A). Why do we need to translate the financial statement of foreign operations? B). Explain the concepts of local currency, functional currency and presentation, orrency with example. K C). How is the profit or loss from translating foreign operations' financial statements from local currency to functional currency treated? D) How are the profit and loss from translating foreign ope ions' financial statements from functional currency to presentation currency treated?
Summarize the impact of foreign exchange rates on the company’s financial statements. What risks do foreign exchange rates pose? Provide academically supported example(s) in your response. What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used? Provide academic support in your response. Compose a hypothetical example to demonstrate the translation process using the two methods. Ensure all information is entered accurately.
A) Explain the concepts of Local Currency, Functional Currency and Presentation Currency with suitable examples. B) Explain the rule for translating the Financial Statements of Foreign Operations from Local Currency to Functional Currency. C) Explain the rule for translating the Financial Statements of Foreign Operations from Functional Currency to Presentation Currency.
Financial accounting is shaped to a significant extent, by the environment, and in particular all of the following, except Select the correct response: The means of measuring economic activity The overall organization of economic activity in society The many uses and users which it serves The characteristics and limitations of financial accounting and financial statements Statement 1 - A foreign currency transaction is initially recognized by translating the foreign currency amount into the functional currency using the spot exchange rate at the date of the transaction. Statement 2- An entity is required to present its financial statements using its presentation currency (i.e., Philippine pesos). However, whenever needed, the entity may translate its financial statements into any functional currency. Select the correct response: Both statements are incorrect Only statement 1 is correct Only statement 2 is correct Both statements are correct
(c) Explain the rule for translating the Financial Statements of Foreign Operations from Functional Currency to Presentation Currency
What term is used to describe the process of reducing foreign exchange risk? Choose the correct. A)international accounting B)exposure C)hedging D)harmonization
1. Explain the rule for translating the Financial Statements of Foreign Operations from Local Currency to Functional Currency. 2. Explain the rule for translating the Financial Statements of Foreign Operations from Functional Currency to Presentation Currency
Explain the following a) Gain or losses on foreign exchange translations. b )Recording of previous periods errors in revenue and expenditure after preparation of final accounts in the current periods.
The approach that identifies the relevant environmental factors and linking it with national accounting practices, an international grouping or pattern of development proposed is: а. Qualitative approach. b. Deductive Approach. С. Subjective approach. d. Inductive Approach. The forward rate in a forward contract: а. is said to be at a discount if it exceeds the spot rate at the inception of the contract. b. changes as the spot rate changes. С. None of the above are true. d. is the spot rate at the expiration date of the contract.
In accordance with U.S. generally accepted accounting principles, which translation combination is appropriate for a foreign operation whose functional currency is the U.S. dollar? Choose the correct option. Method Treatmemt of transition adjustment a. Current rate other comprehensive income b. Current rate Gain or loss in net income c. Temporal other comprehensive income d. Temporal Gain or loss in net income
Explain the concepts of Local Currency, Functional Currency and Presentation Currency with suitable examples Explain the rule for translating the Financial Statements of Foreign Operations from Local Currency to Functional Currency
Describe the following: 1)Recording of previous periods errors in revenue and expenditure after preparation of final accounts in the current periods. 2)Gain or losses on foreign exchange translations.