III. Select Transactions Flashcards
1
Q
- How is a hedge of a net investment in a foreign operation accounted for?
A
Like a cash flow hedge with the effective portion recorded in OCI
2
Q
Conversion of Foreign Financial Statements
225. When is an economy considered as highly inflationary?
A
If the local economy has cumulative inflation is 100% or more over a 3 year period
3
Q
How do you calculate the pension liability?
A
Subtract year end plan assets from year end PBO
PBO - Plan assets = Pension liability
4
Q
firm is applying international accounting standards to its defined-benefit pension plan. At the end of the current year, the actuary informs the firm that the plan has experienced an actuarial gain of $2mn. The average remaining service period of plan participants is ten years. Therefore:
A
OCI is immediately increased through pension gains/losses-OCI
