Excellent Inc. is located in the U.S., but it has subsidiaries in Japan. When the yen depreciates relative to the U.S. dollar, what is the direction of the translation adjustment to consolidate Excellent's financial statements?
A) When there is net asset exposure, the translation adjustment will be positive.
B) There will be no adjustment necessary unless the difference is realized.
C) When there is net liability exposure, the translation adjustment will be positive.
D) The direction of the adjustment is indeterminate.

Question

Quizplus · Accepted Answer

The Answer is C