- CFA Exams
- 2025 Level II
- Topic 3. Financial Statement Analysis
- Learning Module 12. Multinational Operations
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Learning Outcome Statements PDF Download
| 1. Effects of Exchange Rate Changes describe foreign currency transaction exposure, including accounting for and disclosures about foreign currency transaction gains and losses; analyze how changes in exchange rates affect the translated sales of the subsidiary and parent company; | |
| 2. Role of the Functional Currency compare and contrast presentation in (reporting) currency, functional currency, and local currency; | |
| 3. Remeasurement: The Temporal Method compare the current rate method and the temporal method, evaluate how each affects the parent company's balance sheet and income statement, and determine which method is appropriate in various scenarios; calculate the translation effects and evaluate the translation of a subsidiary's balance sheet and income statement into the parent company's presentation currency; | |
| 4. Translation: The All-Current Method compare the current rate method and the temporal method, evaluate how each affects the parent company's balance sheet and income statement, and determine which method is appropriate in various scenarios; calculate the translation effects and evaluate the translation of a subsidiary's balance sheet and income statement into the parent company's presentation currency; | |
| 5. Remeasurement versus Translation compare the current rate method and the temporal method, evaluate how each affects the parent company's balance sheet and income statement, and determine which method is appropriate in various scenarios; calculate the translation effects and evaluate the translation of a subsidiary's balance sheet and income statement into the parent company's presentation currency; | |
| 6. Impact on Financial Statements and Ratios analyze how the current rate method and the temporal method affect financial statements and ratios; | |
| 7. Hyperinflationary Subsidiaries analyze how alternative translation methods for subsidiaries operating in hyperinflationary economies affect financial statements and ratios. | |
| 8. Multinational Operations and a Company's Effective Tax Rate describe how multinational operations affect a company's effective tax rate; | |
| 9. Additional Disclosures on the Effects of Foreign Currency explain how changes in the components of sales affect the sustainability of sales growth; analyze how currency fluctuations potentially affect financial results, given a company's countries of operation. |
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