According to which method is the translation gain or loss taken to the income statement?
A) the current rate method
B) the consolidation method
C) the temporal method
D) the transcription method

Question

Quizplus · Accepted Answer

The temporal method takes into account the fluctuations in exchange rates and assigns the translation gain or loss to the income statement. The current rate method, on the other hand, assigns the translation gain or loss to the comprehensive income section of the statement of changes in equity, while the consolidation method involves combining financial statements of subsidiaries into one set of financial statements for the parent company. The transcription method is not a recognized method of financial reporting.

According to Which Method Is the Translation Gain or Loss