Foreign Currency Translation: SFAS 52
Please provide at least 300 words on the following question to provide a good understanding of the information provided. Please provide a reference. Thank You
Discuss SFAS 52 guidelines as to when foreign currency financial statements are to be "translated" using the current rate method and when they are to be "remeasured" using the temporal method.
© BrainMass Inc. brainmass.com October 2, 2020, 6:02 am ad1c9bdddfhttps://brainmass.com/business/accounting/foreign-currency-translation-621924
Solution Preview
Foreign currency financial statements translated using current rate method means that most items in the financial statement are translated at the current exchange rate. In this method the income statement items are translated at actual exchange rates. The temporal method means that any income generating assets such as inventory, property, plant and equipment are regularly updated to show their market value. The gains and losses from the translated are entered in the current consolidated income. According to the SFAS 52 guidelines first the functional currency is to be determined. The functional ...
Solution Summary
The response provides you a structured explanation of foreign currency translation under SFAS 52. It also gives you the relevant references.