Question 1

The exposure resulting from the translation of foreign-currency-denominated financial statements into Canadian dollars is referred to as:
A) translation (accounting) exposure.
B) transaction exposure.
C) economic exposure.
D) business risk exposure.

Accepted Answer

The translation of foreign-currency-denominated financial statements into Canadian dollars is known as translation exposure. This exposure arises due to the fluctuation in foreign exchange rates, which can impact the value of translated financial statements. Therefore, choice A, translation (accounting) exposure, is the best answer. The other options - transaction exposure, economic exposure, and business risk exposure - all refer to different types of foreign exchange risk.

Question 2

Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, depreciation and amortization must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, depreciation and amortization are translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, depreciation and amortization must be translated using historical rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, depreciation and amortization must be translated using closing rates.

Accepted Answer

Depreciation and amortization, being income statement items, are typically translated using the average exchange rate for the period when the functional currency of the foreign operation differs from the parent's functional currency. This approach provides a reasonable approximation of the effects of exchange rate changes over the period.

Question 3

Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at closing values must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at closing values must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at closing values must be translated using historical rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, the non-monetary items recorded at closing values must be translated using average rates.

Accepted Answer

According to IFRS, if the functional currency of a foreign operation is different from the parent's functional currency, the non-monetary items recorded at closing values must be translated using closing rates. Closing rate is the exchange rate at the end of the reporting period, which is used to translate non-monetary assets and liabilities.

Question 4

Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, the contributed capital must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, the contributed capital must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, the contributed capital must be translated using historical rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, the contributed capital must be translated using average rates.

Accepted Answer

When translating financial statements from the functional currency of a foreign operation to the presentation currency, contributed capital is translated using historical rates. This is because the amounts for contributed capital are fixed at the time of the contribution, reflecting the exchange rate at that specific point in time.

Question 5

If the functional currency of the foreign operation is the same as the parent's functional currency, which of the following statements is correct?
A) The foreign operation's financial statements are translated using the functional currency translation (FCT) method.
B) The foreign operation's financial statements are translated using the presentation currency translation (PCT) method.
C) The foreign operation is classified as a foreign affiliate.
D) The investment in the foreign operation is classified as a non-monetary asset.

Accepted Answer

If the functional currency of the foreign operation is the same as the parent's functional currency, the financial statements of the foreign operation will be translated using the Functional Currency Translation (FCT) method. This is because there is no currency translation required as both use the same functional currency.

Question 6

Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at cost must be translated using historical rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at cost must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at cost must be translated using closing rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, the non-monetary items recorded at cost must be translated using closing rates.

Accepted Answer

If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at cost must be translated using closing rates. This is because closing rates reflect the most up-to-date exchange rates at the end of the reporting period, and are therefore the most appropriate rates to use when translating non-monetary items recorded at cost.

Question 7

ABC Inc. has a single wholly-owned American subsidiary called US1 based in Los Angeles, California, which was acquired January 1, 2020. US1 submitted its financial statements for 2020 to ABC. Selected exchange rates in effect throughout 2020 are shown below: $\begin{array}{|l|r|r|}
\hline \text { Tanuary } 1,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.815 \
\hline \text { December } 31,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.8175 \
\hline \text { Average for } 2020: & \text { US } \$ 1= & \text { CDN } \$ 0.825 \\hline \begin{array}{l}
\text { Date of Purchase of Inventory on } \
\text { Hand: }
\end{array} & \text { US } \$ 1= & \text { CDN } \$ 0.83 \
\hline \text { Date Dividends were declared: } & \text { US } \$ 1= & \text { CDN } \$ 0.8125\
\hline
\end{array}$ US1 financial results for 2020 were as follows:
US1 Financial Statements
At December 31, 2020
(in U.S. dollars)
\(\begin{array}{|l|r|}
\hline \text { Income Statement: } & \
\hline \text { Sales } & \$ 5,000,000 \
\hline \text { Cost of Sales } & \$ 3,500,000 \
\hline \text { Depreciation Expense } & \$ 150,000 \
\hline \text { Bond Interest Expense } & \$ 100,000 \
\hline \text { Other Expense } & \$ 750,000 \\hline \text { Net Income } & \$ 500,000 \
\hline \text { Statement of Retained Earnings: } &  \
\hline \text { January 1, 2020: } & \$ 400,000 \
\hline \text { Net Income } &\$ 500,000 \
\hline \text { Dividends } &  \$ 100,000) \\hline \text { December } 31,2020: & \$ 800,000 \
\hline \text { Balance Sheet } &  \
\hline \text { Cash } &\$ 1,200,000  \
\hline \text { Accounts Receivable } & \$ 1,900,000 \\hline \text { Inventory } & \$ 700,000(\$ 500,000 \text { January 1, 2020) } \
\hline \text { Plant and Equipment (net) } & \$ 400,000 \
\hline \text { Current Liabilities } & \$ 4,200,000 \\hline \text { Bonds Payable } & \$ 2,000,000 \
\hline \text { Common Shares } & \$ 1,000,000 \
\hline \text { Retained Earnings } & \$ 800,000 \
\hline & \$ 4,200,000 \
\hline
\end{array}\) Sales, purchases, bond interest, and other expenses occurred evenly throughout the year.
US1 is considered to be a foreign subsidiary that has a different functional currency than ABC Inc.'s functional currency.
Which of the following rates would be used to translate the company's Dividends paid during the year?
A) US$1 = CDN$0.815
B) US$1 = CDN$0.8125
C) US$1 = CDN$0.825
D) US$1 = CDN$0.83

Accepted Answer

Dividends are translated at the rate in effect on the date they were declared, which is US$1 = CDN$0.8125.

Question 8

Which of the following statements is correct with respect to the translation of cost of sales in a foreign operation where the functional currency of the foreign operation is the same as the parent's functional currency?
A) Opening inventory is translated using an average rate.
B) Opening inventory is translated using closing rates.
C) Ending inventory is translated using an average rate.
D) Ending inventory is translated using the rate in effect when the inventory was acquired.

Accepted Answer

When the functional currency of the foreign operation is the same as the parent's functional currency, the translation of cost of sales includes translating opening and closing inventory at historical exchange rates. Ending inventory is translated using the rate in effect when the inventory was acquired. Therefore, option D is correct.

Question 9

What exposure exists when the present value of future cash flows change as a result of changes in exchange rates?
A) Translation (accounting) exposure
B) Transaction exposure
C) Economic exposure
D) Business risk exposure

Accepted Answer

The exposure described is economic exposure. Economic exposure refers to the risk that a company's cash flows, either the present value or future value, will be affected by changes in exchange rates. This exposure is not related to specific transactions or accounting practices, making options A and B incorrect. Business risk exposure refers to risks related to a company's operations, unrelated to exchange rates.

Question 10

Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, the monetary items must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, the monetary items must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, the shareholders' equity must be translated using closing rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, the non-monetary items recorded at cost must be translated using average rates.

Accepted Answer

If the functional currency of the foreign operation is different than the parent's functional currency, the monetary items must be translated using closing rates. This is because monetary items represent assets and liabilities that are expected to be settled in a different currency at some point in the future, and the closing rates reflect the exchange rates at the end of the period when these items will be settled.

Question 11

Under the presentation currency translation (PCT) method, which of the following statements is correct?
A) Transaction exposure is greatest.
B) The relationship of balance sheet items is best preserved.
C) Income statement items are translated using a mix of rates.
D) Income statement items are translated using average rates.

Accepted Answer

The PCT method preserves the relationship of balance sheet items as they are translated using the exchange rate at the balance sheet date. Transaction exposure is not relevant for PCT as it pertains to individual transactions, while PCT looks at the entire financial statement. Income statement items are translated using exchange rates for the period, not average rates.

Question 12

ABC Inc. has a single wholly-owned American subsidiary called US1 based in Los Angeles, California, which was acquired January 1, 2020. US1 submitted its financial statements for 2020 to ABC. Selected exchange rates in effect throughout 2020 are shown below: $\begin{array}{|l|r|r|}
\hline \text { Tanuary } 1,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.815 \
\hline \text { December } 31,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.8175 \
\hline \text { Average for } 2020: & \text { US } \$ 1= & \text { CDN } \$ 0.825 \\hline \begin{array}{l}
\text { Date of Purchase of Inventory on } \
\text { Hand: }
\end{array} & \text { US } \$ 1= & \text { CDN } \$ 0.83 \
\hline \text { Date Dividends were declared: } & \text { US } \$ 1= & \text { CDN } \$ 0.8125\
\hline
\end{array}$ US1 financial results for 2020 were as follows:
US1 Financial Statements
At December 31, 2020
(in U.S. dollars)
\(\begin{array}{|l|r|}
\hline \text { Income Statement: } & \
\hline \text { Sales } & \$ 5,000,000 \
\hline \text { Cost of Sales } & \$ 3,500,000 \
\hline \text { Depreciation Expense } & \$ 150,000 \
\hline \text { Bond Interest Expense } & \$ 100,000 \
\hline \text { Other Expense } & \$ 750,000 \\hline \text { Net Income } & \$ 500,000 \
\hline \text { Statement of Retained Earnings: } &  \
\hline \text { January 1, 2020: } & \$ 400,000 \
\hline \text { Net Income } &\$ 500,000 \
\hline \text { Dividends } &  \$ 100,000) \\hline \text { December } 31,2020: & \$ 800,000 \
\hline \text { Balance Sheet } &  \
\hline \text { Cash } &\$ 1,200,000  \
\hline \text { Accounts Receivable } & \$ 1,900,000 \\hline \text { Inventory } & \$ 700,000(\$ 500,000 \text { January 1, 2020) } \
\hline \text { Plant and Equipment (net) } & \$ 400,000 \
\hline \text { Current Liabilities } & \$ 4,200,000 \\hline \text { Bonds Payable } & \$ 2,000,000 \
\hline \text { Common Shares } & \$ 1,000,000 \
\hline \text { Retained Earnings } & \$ 800,000 \
\hline & \$ 4,200,000 \
\hline
\end{array}\) Sales, purchases, bond interest, and other expenses occurred evenly throughout the year.
US1 is considered to be a foreign subsidiary that has a different functional currency than ABC Inc.'s functional currency.
Which of the following rates would be used to translate the company's Retained Earnings at the start of the year?
A) US$1 = CDN$0.815
B) US$1 = CDN$0.8175
C) US$1 = CDN$0.825
D) US$1 = CDN$0.83

Accepted Answer

Retained Earnings at the start of the year should be translated using the historical exchange rate in effect at the time the earnings were originally recorded. Since the subsidiary was acquired on January 1, 2020, and the beginning Retained Earnings would reflect the position at this acquisition date, the exchange rate on January 1, 2020, should be used, which is US$1 = CDN$0.815.

Question 13

Under the functional currency translation (FCT) method, which of the following statements is correct?
A) The relationship of balance sheet items is best preserved.
B) A single historic rate is used to translate all income statement items.
C) A net asset exposure is most likely.
D) Historic rates are used to translate most non-monetary items.

Accepted Answer

The answer of Under the functional currency translation (FCT) method,...

Question 14

ABC Inc. has a single wholly-owned American subsidiary called US1 based in Los Angeles, California, which was acquired January 1, 2020. US1 submitted its financial statements for 2020 to ABC. Selected exchange rates in effect throughout 2020 are shown below: $\begin{array}{|l|l|r|}
\hline \text { January } 1,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.815 \
\hline \text { December } 31,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.8175 \
\hline \text { Average for } 2020: & \text { US } \$ 1= & \text { CDN } \$ 0.825 \\hline \text { Date of Purchase of Inventory on Hand: } & \text { US } \$ 1= & \text { CDN } \$ 0.83 \
\hline \text { Date Dividends were declared: } & \text { US } \$ 1= & \text { CDN } \$ 0.8125\
\hline
\end{array}$ US1 financial results for 2020 were as follows:
US1 Financial Statements
At December 31, 2020
(in U.S. dollars)
\(\begin{array}{|l|r|}
\hline \text { Income Statement: } & \
\hline \text { Sales } & \$ 5,000,000 \
\hline \text { Cost of Sales } & \$ 3,500,000 \
\hline \text { Depreciation Expense } & \$ 150,000 \
\hline \text { Bond Interest Expense } & \$ 100,000 \
\hline \text { Other Expense } & \$ 750,000 \\hline \text { Net Income } & \$ 500,000 \
\hline \text { Statement of Retained Earnings: } &  \
\hline \text { January 1, 2020: } & \$ 400,000 \
\hline \text { Net Income } &\$ 500,000 \
\hline \text { Dividends } &  \$ 100,000) \\hline \text { December } 31,2020: & \$ 800,000 \
\hline \text { Balance Sheet } &  \
\hline \text { Cash } &\$ 1,200,000  \
\hline \text { Accounts Receivable } & \$ 1,900,000 \\hline \text { Inventory } & \$ 700,000(\$ 500,000 \text { January 1, 2020) } \
\hline \text { Plant and Equipment (net) } & \$ 400,000 \
\hline \text { Current Liabilities } & \$ 4,200,000 \\hline \text { Bonds Payable } & \$ 2,000,000 \
\hline \text { Common Shares } & \$ 1,000,000 \
\hline \text { Retained Earnings } & \$ 800,000 \
\hline & \$ 4,200,000 \
\hline
\end{array}\) Sales, purchases, bond interest, and other expenses occurred evenly throughout the year.
US1 is considered to be a foreign subsidiary that has a different functional currency than ABC Inc.'s functional currency.
Which of the following rates would be used to translate US1's income statement items?
A) US$1 = CDN$0.815
B) US$1 = CDN$0.8175
C) US$1 = CDN$0.825
D) US$1 = CDN$0.83

Accepted Answer

Income statement items for a foreign subsidiary are translated using the average exchange rate over the period in which the revenues and expenses occurred. In this case, the average exchange rate for 2020 is US$1 = CDN$0.825.

Question 15

If the functional currency of a foreign operation is different than the parent's, functional currency, how are exchange gains and losses to be reported?
A) As part of other comprehensive income.
B) In an exchange account.
C) As part of the non-controlling interest.
D) As part of the acquisition differential amortization.

Accepted Answer

Exchange gains and losses arising from the translation of a foreign operation with a functional currency different from the parent's functional currency should be reported as part of other comprehensive income. This is in accordance with the requirements of both US GAAP and IFRS.

Question 16

Under the presentation currency translation (PCT) method, which of the following statements is correct?
A) All balance sheet items excluding shareholders equity are translated using the closing rate in effect at the balance sheet date.
B) All balance sheet items are translated using the closing rate in effect at the balance sheet date.
C) All balance sheet items are translated using the average rate in effect throughout the year.
D) Only non-current balance sheet items are translated using the closing rate in effect at the balance sheet date.

Accepted Answer

The answer of Under the presentation currency translation (PCT) method,...

Question 17

ABC Inc. has a single wholly-owned American subsidiary called US1 based in Los Angeles, California, which was acquired January 1, 2020. US1 submitted its financial statements for 2020 to ABC. Selected exchange rates in effect throughout 2020 are shown below: $\begin{array}{|l|r|r|}
\hline \text { Tanuary } 1,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.815 \
\hline \text { December } 31,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.8175 \
\hline \text { Average for } 2020: & \text { US } \$ 1= & \text { CDN } \$ 0.825 \\hline \begin{array}{l}
\text { Date of Purchase of Inventory on } \
\text { Hand: }
\end{array} & \text { US } \$ 1= & \text { CDN } \$ 0.83 \
\hline \text { Date Dividends were declared: } & \text { US } \$ 1= & \text { CDN } \$ 0.8125\
\hline
\end{array}$ US1 financial results for 2020 were as follows:
US1 Financial Statements
At December 31, 2020
(in U.S. dollars)
\(\begin{array}{|l|r|}
\hline \text { Income Statement: } & \
\hline \text { Sales } & \$ 5,000,000 \
\hline \text { Cost of Sales } & \$ 3,500,000 \
\hline \text { Depreciation Expense } & \$ 150,000 \
\hline \text { Bond Interest Expense } & \$ 100,000 \
\hline \text { Other Expense } & \$ 750,000 \\hline \text { Net Income } & \$ 500,000 \
\hline \text { Statement of Retained Earnings: } &  \
\hline \text { January 1, 2020: } & \$ 400,000 \
\hline \text { Net Income } &\$ 500,000 \
\hline \text { Dividends } &  \$ 100,000) \\hline \text { December } 31,2020: & \$ 800,000 \
\hline \text { Balance Sheet } &  \
\hline \text { Cash } &\$ 1,200,000  \
\hline \text { Accounts Receivable } & \$ 1,900,000 \\hline \text { Inventory } & \$ 700,000(\$ 500,000 \text { January 1, 2020) } \
\hline \text { Plant and Equipment (net) } & \$ 400,000 \
\hline \text { Current Liabilities } & \$ 4,200,000 \\hline \text { Bonds Payable } & \$ 2,000,000 \
\hline \text { Common Shares } & \$ 1,000,000 \
\hline \text { Retained Earnings } & \$ 800,000 \
\hline & \$ 4,200,000 \
\hline
\end{array}\) Sales, purchases, bond interest, and other expenses occurred evenly throughout the year.
US1 is considered to be a foreign subsidiary that has a different functional currency than ABC Inc.'s functional currency.
Which of the following rates would be used to translate the company's Assets and Liabilities?
A) US$1 = CDN$0.815
B) US$1 = CDN$0.8175
C) US$1 = CDN$0.825
D) US$1 = CDN$0.83

Accepted Answer

Assets and Liabilities on the Balance Sheet are translated at the current rate at the balance sheet date, which is December 31, 2020, hence US$1 = CDN$0.8175.

Question 18

ABC Inc. has a single wholly-owned American subsidiary called US1 based in Los Angeles, California, which was acquired January 1, 2020. US1 submitted its financial statements for 2020 to ABC. Selected exchange rates in effect throughout 2020 are shown below: $\begin{array}{|l|r|r|}
\hline \text { Tanuary } 1,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.815 \
\hline \text { December } 31,2020: & \text { US } \$ 1= & \text { CDN } \$ 0.8175 \
\hline \text { Average for } 2020: & \text { US } \$ 1= & \text { CDN } \$ 0.825 \\hline \begin{array}{l}
\text { Date of Purchase of Inventory on } \
\text { Hand: }
\end{array} & \text { US } \$ 1= & \text { CDN } \$ 0.83 \
\hline \text { Date Dividends were declared: } & \text { US } \$ 1= & \text { CDN } \$ 0.8125\
\hline
\end{array}$ US1 financial results for 2020 were as follows:
US1 Financial Statements
At December 31, 2020
(in U.S. dollars)
\(\begin{array}{|l|r|}
\hline \text { Income Statement: } & \
\hline \text { Sales } & \$ 5,000,000 \
\hline \text { Cost of Sales } & \$ 3,500,000 \
\hline \text { Depreciation Expense } & \$ 150,000 \
\hline \text { Bond Interest Expense } & \$ 100,000 \
\hline \text { Other Expense } & \$ 750,000 \\hline \text { Net Income } & \$ 500,000 \
\hline \text { Statement of Retained Earnings: } &  \
\hline \text { January 1, 2020: } & \$ 400,000 \
\hline \text { Net Income } &\$ 500,000 \
\hline \text { Dividends } &  \$ 100,000) \\hline \text { December } 31,2020: & \$ 800,000 \
\hline \text { Balance Sheet } &  \
\hline \text { Cash } &\$ 1,200,000  \
\hline \text { Accounts Receivable } & \$ 1,900,000 \\hline \text { Inventory } & \$ 700,000(\$ 500,000 \text { January 1, 2020) } \
\hline \text { Plant and Equipment (net) } & \$ 400,000 \
\hline \text { Current Liabilities } & \$ 4,200,000 \\hline \text { Bonds Payable } & \$ 2,000,000 \
\hline \text { Common Shares } & \$ 1,000,000 \
\hline \text { Retained Earnings } & \$ 800,000 \
\hline & \$ 4,200,000 \
\hline
\end{array}\) Sales, purchases, bond interest, and other expenses occurred evenly throughout the year.
US1 is considered to be a foreign subsidiary that has a different functional currency than ABC Inc.'s functional currency.
Which of the following rates would be used to translate the company's Common Shares?
A) US$1 = CDN$0.815
B) US$1 = CDN$0.8175
C) US$1 = CDN$0.825
D) US$1 = CDN$0.83

Accepted Answer

Common Shares are translated using the historical exchange rate, which in this case is the rate on the date the shares were issued. Since the subsidiary was acquired on January 1, 2020, the historical rate on that date, US$1 = CDN$0.815, would be used.

Question 19

Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using historical rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, dividends must be translated using average rates.

Accepted Answer

Dividends are translated at the exchange rate on the date of the dividend declaration, which is considered a historical rate. This applies regardless of whether the functional currency of the foreign operation is different from the parent's functional currency or not.

Question 20

The risk exposure that occurs between the time of entering into a transaction and the time of settling it is referred to as:
A) translation (accounting) exposure.
B) transaction exposure.
C) economic exposure.
D) business risk.

Accepted Answer

Transaction exposure refers to the risk exposure that occurs between the time of entering into a transaction and the time of settling it, including the risk of changes in exchange rates during that period. Translation exposure refers to the risk of changes in exchange rates on the value of assets and liabilities denominated in foreign currencies. Economic exposure refers to the risk of changes in exchange rates on the underlying cash flows and profitability of a company's operations. Business risk refers to the overall risk of a company's operations, including factors such as competition, market conditions, and management decisions.

Quiz 11: Translation and Consolidation of Foreign Operations

The exposure resulting from the translation of foreign-currency-denominated financial statements into Canadian dollars is referred to as:

Which of the following statements is correct?

Which of the following statements is correct?

Which of the following statements is correct?

If the functional currency of the foreign operation is the same as the parent's functional currency, which of the following statements is correct?

Which of the following statements is correct?

Which of the following statements is correct with respect to the translation of cost of sales in a foreign operation where the functional currency of the foreign operation is the same as the parent's functional currency?

What exposure exists when the present value of future cash flows change as a result of changes in exchange rates?

Which of the following statements is correct?

Under the presentation currency translation (PCT) method, which of the following statements is correct?

Under the functional currency translation (FCT) method, which of the following statements is correct?

If the functional currency of a foreign operation is different than the parent's, functional currency, how are exchange gains and losses to be reported?

Under the presentation currency translation (PCT) method, which of the following statements is correct?

Which of the following statements is correct?

The risk exposure that occurs between the time of entering into a transaction and the time of settling it is referred to as: