How does the functional currency affect which method is used

Related BrainMass Solutions

• Foreign Currency Translation: SFAS 52

  If the functional currency of the subsidiary is not its home currency or when the subsidiary operates in a highly inflationary environment, the temporal method is used. This method is called the re-measuring method.

• International Financial Management: Example Problem

  Temporal method which is similar to the monetary/non monetary method. The difference is that the current method, or the current exchange rate, is used for translating inventories. 4.

• SFAS 8 versus SFAS 52

  On the other hand, if the functional currency is the U.S. dollar, the temporal method set by SFAS No. 8 should be used with any resulting exchange rate conversion gains or losses being included in net income.

• Clarke Corp subsidiary: Report foreign currency on consolidated balance sheet

  Assume that the peso is the subsidiary's functional currency. What balances does a consolidated balance sheet report as of December 31, 2009? B. Assume that the U.S. dollar is the subsidiary's functional currenty.

• Translation of Financial Statements of Foreign Affiliates

  The attached MS Word document will show how the financial statements of Ventana Grains are translated when in P1 the local currency is the functional currency and in P2 to remeasure when the US dollar is the functional currency.

• Exchange Rate Fluctuations and Translation methods

  The translation methods allowed under FAS No. 52 is current rate method and temporal method. How are they different? Which is better? Should there be more than one and why?

• Translating the Financial Statements into U.S. Dollars

  Assuming that foreign currency is the functional currency translate the financial statements into U.S. dollars. See attached for calculations. Since the foreign currency is the functional currency, the current rate method should be used.

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• What are some current changes proposed by the International

  The method used need not be consistent across the company, as long as the rules for that method are followed. _____ This is only a handful of the proposed changes that will affect GAAP.