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Flashcards in Foreign Currency Accounting Deck (25):
1

What are transactions with a foreign entity denominated in a foreign currency?

Foreign currency transactions

2

What is the conversion of financial statements of a foreign entity into financial statements expressed in the domestic currency?

Foreign currency translation

3

What is the exchange rate at the current date, or for immediate delivery of currency, often referred to as the spot rate?

Currency exchange rate

4

What is the exchange rate existing now for exchanging two currencies at a specific future date?

Forward exchange rate

5

What is another name for forward exchange rate?

Bet

6

What is the rate in effect at the date of issuance of stock or acquisition of assets?

Historical exchange rate

7

What is historical exchange rate used for?

Equity

8

What rate is calculated to take into account the exchange rate fluctuations for the period?

Weighted average rate

9

What is the weighted average rate used for?

Income statement

10

What is the currency of the entity ultimately reporting financial results of the foreign entity?

Reporting currency

11

What is the currency of the of the primary economic environment in which the entity operates, usually the local currency or the reporting currency?

Functional currency

12

What is restatement of financial statements denominated in the functional currency to the reporting currency using appropriate rates of exchange?

Foreign currency translation

13

Is foreign currency translation functional or dysfunctional?

Functional

14

What is the restatement of foreign financial statements from the foreign currency to the reporting currency using appropriate rates of exchange?

Foreign currency remeasurement

15

Is foreign currency remeasurement functional or dysfunctional?

Dysfunctional

16

What are the 2 situations for foreign currency remeasurement?

The reporting currency is the functional currency and the financial statements must be restated in the entity's functional currency prior to translating currency

17

What are the steps in restating foreign financial statements?

Prepare in accordance with GAAP/IFRS, Determine the functional currency and appropriate exchange rates, and remeasure and/or translate the financial statements

18

What is the remeasurement method also known as?

Temporal method

19

What rate is used for monetary items on the balance sheet during the remeasurement method and is it fixeed or fluctuate?

Current/year end rate, fixed

20

What rate does non monetary items on the balance sheet use during the remeasurement method and is it fixed or fluctuate?

Historical rate, fluctuate

21

What rate does non balance sheet related items on the income statement use during the remeasurement method?

Weighted average rate

22

What is the translation method also known as?

Current rate method

23

What are all income statement items rate during translation method?

Weighted average rate

24

Does remeasurement or translation amounts go in other comprehensive income?

Translation

25

What rate is used for all assets and liabilities in the translation method?

Current exchange rate