Which of the following statements is true of non-local currency balances in the foreign currency financial statements of foreign operations?
A) These are not reported in the consolidated financial statements.
B) Any gain is shown in the balance sheet of the company as an asset.
C) Any loss is reflected in the measurement of consolidated net income.
D) No gain or loss is reported in the financial statements.

Question

Quizplus · Accepted Answer

Non-local currency balances in the foreign currency financial statements of foreign operations are translated into the reporting currency using the current exchange rate, which may result in a gain or loss. Any loss is reflected in the measurement of consolidated net income. However, any gain is not shown in the balance sheet of the company as an asset, and is not reported separately in the financial statements.

Which of the Following Statements Is True of Non-Local Currency