If a Canadian corporation reports its financial results in Canadian dollars and most of its business is conducted in the U.S., an increase in value in the Canadian dollar (versus the U.S dollar) would result in an exchange gain.

Question

Quizplus · Accepted Answer

An increase in value in the Canadian dollar would result in a decrease in the value of the U.S. dollar relative to the Canadian dollar. This would lead to a foreign exchange loss for the Canadian corporation as they would receive less Canadian dollars when converting their U.S. revenue and assets back into their home currency.

If a Canadian Corporation Reports Its Financial Results in Canadian