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Flashcards in Class 11 Slides Deck (3)
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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)