F2- foreign Flashcards
1
Q
Foreign Currency Transactions
A
- Transactions with a foreign entity.
- Denominated in a foreign currency.
2
Q
Foreign Currency Translation
A
- Conversion of F/S of a foreign entity into F/S expressed in the Domestic currency
3
Q
Current Exchange Rate
A
- Exchange rate at the Current date, or for Immediate delivery of currency.
- Referred as Spot Rate
4
Q
Historical Exchange Rate
A
- Rate in effect at the date of issuance of Stock or Acq. of assets
5
Q
Reporting Currency
A
- The Currency of the Entity ultimately reporting financial results of the foreign entity.
6
Q
Functional Currency
A
- Currency of Primary economic environments in which the entity operates, usually the local currency or the reporting currency
7
Q
Remeasurement Method: Balance Sheet
A
- Monetary Items: Current/Yr-End Rate
- Non-monetary Items:Historical Rate
8
Q
Remeasurement Method: Income Sheet
A
- Non-Balance Sheet Related Items= W. Avg. Rate
- B/S Related Items= Historical Rate
9
Q
Translation Method: Balance Sheet
A
- Assets & Liab.= Current/ Yr-end Rate
- C.S/APIC= Historical Rate
- R/E= Roll Forward
10
Q
Translation Method: Income Statement
A
- All Income St. items W. Avg. Rate
- Transfer net income to R/E
11
Q
Translation Gain/Loss
A
- Other Comp. Income
- Plug: Translation adjustment
- Equal to the Difference btwn the debits & Credits in Trail Balance
