A foreign currency transaction can be denominated in one currency, yet measured in another. Explain the difference between these two terms using the case of a Canadian dollar borrowing on the part of a Mexican affiliate of a U.S. parent company that designates the U.S. dollar as a functional currency.
The identifying factor on whether a foreign currency transaction should be denominated in one currency (translation) or measured in another (remeasurement) is the transacting entity's functional currency. Functional currency is the ...
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