- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 12. Multinational Operations
- Subject 5. Remeasurement versus Translation
CFA Practice Question
How are foreign currency translation adjustments resulting from translating foreign currency financial statements to U.S. dollars currently reported?
B. Displayed as an extraordinary item in the income statement for the period in which the exchange rate changes.
C. Displayed in the stockholders' equity section of the balance sheet.
D. Displayed as an ordinary item in the income statement for losses, but deferred in the balance sheet for gains.
E. Displayed in none of the foregoing ways.
A. Displayed as an ordinary item in the income statement for the accounting period in which the exchange rate changes.
B. Displayed as an extraordinary item in the income statement for the period in which the exchange rate changes.
C. Displayed in the stockholders' equity section of the balance sheet.
D. Displayed as an ordinary item in the income statement for losses, but deferred in the balance sheet for gains.
E. Displayed in none of the foregoing ways.
Correct Answer: C
User Contributed Comments 3
| User | Comment |
|---|---|
| tkorchmaros | 'translation' means 'all-current-method' and therefore translation gains/losses are flow into the cumulative translation adjustment account in stockholder's equity. |
| niti | i think so.. |
| bananabun2 | yes, the process of "remeasurement" is when we use the temporal method |