Suppose the German subsidiary of a U.S. firm had current assets of DM3 million, fixed assets of DM6 million and current liabilities of DM3 million both at the start and at the end of the year. There are no long?term liabilities. If the DM depreciated during that year from $.48 to $.38, the FASB?52 translation gain (loss. to be included in the parent company's equity account is

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The translation loss is calculated by translating the net asset position at the beginning and end of the year. The net assets are DM6 million (DM3 million current assets + DM6 million fixed assets - DM3 million current liabilities). The depreciation from $.48 to $.38 results in a loss of $0.10 per DM on DM6 million, totaling a loss of $600,000.

Suppose the German Subsidiary of a U