CFA Practice Question

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CFA Practice Question

Under U.S. GAAP, the balance sheet value of cash denominated in currency other than U.S. dollars is which one of the following?

A. Historical cost
B. Net realizable value
C. Discounted present value
D. Current market price
Correct Answer: D

Cash denominated in foreign currency is translated at the current rate of exchange at the balance sheet date. Consequently, such cash is valued at current market price. In contrast, historical cost and current market price of domestic cash is the same.

User Contributed Comments 3

User Comment
kalps This is obvious as the other answers are useless
o123 what if you purchased Yens a year ago and the historical cost of the purchase was less than the current market price in whatever base currency your valuing using on the B/S ??
ljamieson it is worth whatever you get if you were to liquidate the asset at the moment in time the B/S is drafted. the B/S is a snapshot.
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