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.

Question

Quizplus · 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.

If the Functional Currency of a Foreign Operation Is Different