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  • 3 - International Accounting

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    Farida Yosuf
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    This document discusses two methods for translating financial statements: 1. The current rate method, which translates asset and liability accounts at the current exchange rate and equity accounts at the historical rate. An example is provided of translating a year-end balance sheet and income statement from Swiss francs to U.S. dollars using this method. 2. The temporal method, also known as the remeasurement method, which converts all balance sheet items at the exchange rate on the balance sheet date and income statement items at the average rate for the period. An example demonstrates remeasuring the financial statements of a foreign subsidiary from Swiss francs to U.S. dollars using this method.

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    International Accounting

    Original Title

    3- International Accounting

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    This document discusses two methods for translating financial statements: 1. The current rate method, which translates asset and liability accounts at the current exchange rate and equity accounts at the historical rate. An example is provided of translating a year-end balance sheet and income statement from Swiss francs to U.S. dollars using this method. 2. The temporal method, also known as the remeasurement method, which converts all balance sheet items at the exchange rate on the balance sheet date and income statement items at the average rate for the period. An example demonstrates remeasuring the financial statements of a foreign subsidiary from Swiss francs to U.S. dollars using this method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views9 pages

    3 - International Accounting

    Uploaded by

    Farida Yosuf
    This document discusses two methods for translating financial statements: 1. The current rate method, which translates asset and liability accounts at the current exchange rate and equity accounts at the historical rate. An example is provided of translating a year-end balance sheet and income statement from Swiss francs to U.S. dollars using this method. 2. The temporal method, also known as the remeasurement method, which converts all balance sheet items at the exchange rate on the balance sheet date and income statement items at the average rate for the period. An example demonstrates remeasuring the financial statements of a foreign subsidiary from Swiss francs to U.S. dollars using this method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 9

    ‫َ‬ ‫ن‬

    ‫يمي وأنت‪ِ /‬‬


    ‫أنت خارج من المجمع‪ ،‬شارع ال ـ ‪( KM‬إسالم‪)01095350069 -‬‬ ‫مكتبة التفوق‪ ،‬أول شارع‬

    ‫‪International‬‬
    ‫‪Accounting‬‬
    ‫)‪Session (3‬‬
    ‫‪Translation of financial statements‬‬

    ‫حممود حممد بدوي‬


    Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

    Translation of financial statements

    Current Rate Method

    2
    Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

    Example:

    On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in


    Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a
    purchase transaction. The 2014 financial statements stated in Swiss francs are given below.

    Required:

    A. Translate the year-end balance sheet and income statement of the foreign subsidiary
    using the current rate method of translation.
    B. Prepare a schedule to verify the translation adjustment.

    3
    ‫‪Mahmoud Mohamed Badwi‬‬ ‫صلي علي النيب من قلبك‪ ،‬واذكر الل‬

    ‫‪4‬‬
    ‫‪Mahmoud Mohamed Badwi‬‬ ‫صلي علي النيب من قلبك‪ ،‬واذكر الل‬

    ‫‪5‬‬
    Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

    Temporal Method (Remeasurement Method)

    6
    Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

    Example:

    On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in


    Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a
    purchase transaction. The 2014 financial statements stated in Swiss francs are given below.

    Required:

    A. Convert (remeasure) the financial statements of the foreign subsidiary using the
    temporal method of translation.
    B. Prepare a schedule to verify the translation gain or loss.

    7
    ‫‪Mahmoud Mohamed Badwi‬‬ ‫صلي علي النيب من قلبك‪ ،‬واذكر الل‬

    ‫‪8‬‬
    ‫‪Mahmoud Mohamed Badwi‬‬ ‫صلي علي النيب من قلبك‪ ،‬واذكر الل‬

    ‫‪9‬‬

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