When translating from the local to functional currency as opposed to the functional to presentation currency differences arise in relation to the treatment of which of the following?
A) Share capital.
B) Cost of goods sold.
C) Depreciation expense.
D) Accounts receivable.

Question

Quizplus · Accepted Answer

Depreciation expense is typically calculated using the functional currency, whereas accounts receivable, share capital, and cost of goods sold are typically recorded in the local currency. Therefore, when translating from local to functional currency, depreciation expense needs to be converted using the applicable exchange rate, which can result in differences in the final translated amount.

When Translating from the Local to Functional Currency as Opposed