Page 5 - 2019 FAC4862_4 Test 4 slides - Foreign Op & Cashflow

THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES (TRANSLATION)

Outcomes

• Identify the functional currency of a foreign operation.

• Translate the financial statements of a foreign

operation of which the functional currency differs from

the presentation currency of its parent, to the

presentation currency of the parent.

• Consolidate the translated financial statements of the

foreign operation of which the functional currency

differs from the presentation currency of the parent by

applying normal consolidation techniques.

• Translate the financial statements of a stand-alone

foreign operation from its functional currency to a

different presentation currency.

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