Translation gains or losses can be quite different from operating gains or losses not only in magnitude but also in sign.

Question

Quizplus · Accepted Answer

This statement is true because translation gains or losses are related to fluctuations in foreign exchange rates, whereas operating gains or losses are related to the routine income and expenses of a business. As exchange rates can change rapidly and unpredictably, translation gains or losses can be volatile and have a different impact on financial statements compared to operating gains or losses. Additionally, translation gains or losses can be positive or negative, depending on whether a company's functional currency strengthens or weakens against the currencies it uses for transactions or holds as assets or liabilities.

Translation Gains or Losses Can Be Quite Different from Operating