CFA Practice Question

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CFA Practice Question

Accounting (translation) exposure relates to:

A. The potential that a fraud has occurred and is undetected.
B. The risk that fluctuations in foreign exchange rates will cause a loss on the conversion of an asset into $US.
C. Cash gains (losses) arising from the conversion of non-$US denominated asset into $US.
Correct Answer: B

Translation relates to the reporting of non-$US denominated financial statement into $US for reporting purposes. The translation exposure is the risk that fluctuations in foreign exchange rates will give rise to translation gains (losses) either in current income or in other comprehensive income.

User Contributed Comments 2

User Comment
davidt876 you guys should really replace "$US" with "the company's reporting currency"
ashish100 You should really be thankful to the US and acknowledge its greatness
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