Questions from Financial Accounting

Q: Why is there increasing interest in the adoption of a single set

Why is there increasing interest in the adoption of a single set of high-quality accounting standards?

Q: A Canadian-based subsidiary of a U.S. parent

A Canadian-based subsidiary of a U.S. parent uses the Canadian dollar as its functional currency. Describe the methodology for translating the subsidiary’s financial statements into the parent’s repor...

Q: A U.S. company has a foreign sales branch located

A U.S. company has a foreign sales branch located in Spain. The Spanish branch has selected the U.S. dollar for its functional currency. Describe the methodology for remeasuring the branch’s financial...

Q: Discuss the accounting treatment and disclosure of translation adjustments. When does

Discuss the accounting treatment and disclosure of translation adjustments. When does the translation adjustment account have a debit balance? When does it have a credit balance?

Q: Where is the remeasurement gain or loss shown in the consolidated financial

Where is the remeasurement gain or loss shown in the consolidated financial statements?

Q: When the functional currency is the foreign affiliate’s local currency, why

When the functional currency is the foreign affiliate’s local currency, why are the stockholders’ equity accounts translated at historical exchange rates? How is retained earnings computed?

Q: Comment on the following statement: “The use of the current

Comment on the following statement: “The use of the current exchange rate method of translating a foreign affiliate’s financial statements allows for an assessment of foreign management by the same ra...

Q: A U.S. company paid more than book value in

A U.S. company paid more than book value in acquiring a foreign affiliate. How is this excess reported in the consolidated balance sheet and income statement in subsequent periods when the functional...

Q: What is the logic behind the parent company’s recognizing on its books

What is the logic behind the parent company’s recognizing on its books its share of the translation adjustment arising from the translation of its foreign subsidiary?

Q: Are all foreign subsidiaries consolidated? Why or why not?

Are all foreign subsidiaries consolidated? Why or why not?