Class 11 Slides Flashcards
1
Q
What is the difference between FC transactions and FC translation?
A
FC Transaction: A transaction that is denominated in or requires settlement in a foreign currency
FC Translation: The process of expressing in the presentation currency amounts that are denominated or measured in a different currency.
2
Q
What is the objective of FC translation?
A
To provide info regarding the exposed economic effects of an exchange rate change on an entity’s cash flows and equity.
3
Q
When are the current and temporal methods used?
A
Current: When functional currency is local currency, (translate to USD)
Temporal: When FC is US Dollar (still translate to USD)
