When translating from the functional currency into the presentation currency, exchange differences arise because of which of the following?
A) Opening net assets are translated at a closing rate different from the previous closing rate
B) Income and expense items are translated at rates different from the closing rate used for all assets and liabilities
C) Both a and b
D) None of the above

Question

Quizplus · Accepted Answer

Exchange differences arise when translating from the functional currency to the presentation currency due to both a) opening net assets being translated at a different rate than the previous closing rate and b) income and expense items being translated at rates different from the closing rate used for all assets and liabilities.

When Translating from the Functional Currency into the Presentation Currency