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    Translation Exposure

    Uploaded by

    Trần Thị Mai Anh

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd

    Translation Exposure

    Uploaded by

    Trần Thị Mai Anh
    7 views1 page

    Copyright

    © © All Rights Reserved

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    RTF, PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Download as rtf, pdf, or txt
    7 views1 page

    Translation Exposure

    Uploaded by

    Trần Thị Mai Anh

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Download as rtf, pdf, or txt
    of 1

    Translation exposure

    Overview
    Reporting currency
    the currency that the reporting entity uses to prepare its financial statements
    Foreign currency
    Any other currency used by an entity of this same multinational firm in its financial
    statements
    Integrated foreign entity
    If the foreign subsidiary operates as an extension of the parent company’s operations.
    Foreign Entity
    Any distinct or separable business that prepares its financial statements in any
    currency other than the reporting currency of the parent company
    Integrated foreign entity
    If the foreign subsidiary operates as an extension of the parent company’s operations
    Separable operation
    If the foreign subsidiary operates completely separately from the parent company.
    Functional Currency
    the currency of the primary economic environment in which the subsidiary operates.
    Remeasurement
    reporting currency = functional currency
    Translation
    reporting currency ≠ functional currency
    Cumulative translation adjustment (CTA)
    Any changes arising from translation.
    Translation method
    Local = Functional = U.S. dollars
    Remeasure to US dollars (
    Local = Functional # USD
    Translate to US (current rate method)
    Local # Functional # USD
    Remeasure from foreign currency to functional (temporal)
    Translate to US (Current rate)
    Local # Functional = USD
    Remeasure to US (temporal)
    Functional # Local = USD
    Translate to USD

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