CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

At the end of the accounting period the subsidiary reports the following trial balance:

The relevant exchange rates during the year are as follows:

January 1: 1SF=$1.71
Weighted average: 1SF=$1.64
December 31: 1SF=$1.62

Under the current method, reported sales for the subsidiary are
A. $25,000
B. $41,000
C. $40,500
Explanation: Sales are translated at the average exchange rate of $1.64 for a total of $41,000.

User Contributed Comments 4

User Comment
danlan2 Always the average exchange rate, current method or temporal method.
volkovv This is true for sales, since they occur throughout the year. But if you can identify a certain date for a certain income statement expense (i.e. Gain on Sale of Equipment) then you would use exchange rate on that date and not the weighted average.
malawyer sure danlan, always use the same - this is why it's 2 methods ;-)
Hishy I think he's just referring to sales
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