F2- foreign

Question 1

Foreign Currency Transactions

Answer 1

• Transactions with a foreign entity.

- Denominated in a foreign currency.

Question 2

Foreign Currency Translation

Answer 2

• Conversion of F/S of a foreign entity into F/S expressed in the Domestic currency

Question 3

Current Exchange Rate

Answer 3

• Exchange rate at the Current date, or for Immediate delivery of currency.
• Referred as Spot Rate

Question 4

Historical Exchange Rate

Answer 4

• Rate in effect at the date of issuance of Stock or Acq. of assets

Question 5

Reporting Currency

Answer 5

• The Currency of the Entity ultimately reporting financial results of the foreign entity.

Question 6

Functional Currency

Answer 6

• Currency of Primary economic environments in which the entity operates, usually the local currency or the reporting currency

Question 7

Remeasurement Method: Balance Sheet

Answer 7

• Monetary Items: Current/Yr-End Rate

- Non-monetary Items:Historical Rate

Question 8

Remeasurement Method: Income Sheet

Answer 8

• Non-Balance Sheet Related Items= W. Avg. Rate

- B/S Related Items= Historical Rate

Question 9

Translation Method: Balance Sheet

Answer 9

• Assets & Liab.= Current/ Yr-end Rate
• C.S/APIC= Historical Rate
• R/E= Roll Forward

Question 10

Translation Method: Income Statement

Answer 10

• All Income St. items W. Avg. Rate

- Transfer net income to R/E

Question 11

Translation Gain/Loss

Answer 11

• Other Comp. Income
• Plug: Translation adjustment
• Equal to the Difference btwn the debits & Credits in Trail Balance