CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

Which of the following is a characteristic of a remeasurement exchange gain or loss?

I. It is generally the result of an increase or decrease in non-monetary assets that were remeasured from the exchange rate at the beginning of the period, or on the date of the generating transaction, to the current exchange rate at the end of the period.
II. It is recognized as an exchange gain or loss in the current period.
III. It causes debits and credits in the trial balance to be equal, but it can also be proven.
A. I and II
B. II and III
C. I, II and III
Explanation: According to the textbook, II and III all describe characteristics of a remeasurement exchange gain or loss.

User Contributed Comments 6

User Comment
NatalyaT I do not understand III. Can somebody explain what does it mean?
ankit7878 actually when wver u combine two a/cs a trial b/l is also made and it shd also match, in tranlation we change the values of some dr and some cr items
the mismatch caused in the Trial b/l coz of this is matched or plugged by translation loss or gain
danlan2 Remeasurement: temporal method. So II is right.
allanzhu I is incorrect - monetary assets is only to be considered under remeasurement (temporal method).
dblueroom I thought translation G/L stems from exchange rate flow and holding effect on monetary accounts.
rhardin Yes, non-monetary assets are not measured at current rates under the temporal method, which immediately makes statement I incorrect since it states the opposite.
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