_____ Under FAS 52, how is the effect of an exchange rate change for the current year reported under the temporal method of translation?
A) Currently in the income statement.
B) Currently in the income statement as an extraordinary item if material.
C) As a direct charge or credit to stockholders' equity.
D) Deferred in the asset or liability section of the balance sheet.
E) None of the above.

Question

Quizplus · Accepted Answer

Under FAS 52, the effect of an exchange rate change for the current year, when using the temporal method of translation, is reported currently in the income statement. This method translates monetary assets and liabilities at the current exchange rate, with the resulting gains or losses recognized in the income statement.

_____ Under FAS 52, How Is the Effect of an Exchange