When the current rate method is used, any exchange rate change adjustment to a parent's long-term intercompany receivable from (or payable to) its foreign subsidiary is reported currently in earnings-only if the amount is not expected to be paid in the foreseeable future.

Question

Quizplus · Accepted Answer

Under the current rate method, exchange rate changes affecting long-term intercompany receivables or payables, where settlement is not planned or anticipated in the foreseeable future, are recognized in other comprehensive income (OCI), not in current earnings.

When the Current Rate Method Is Used, Any Exchange Rate