translating and remeasuring financial statements of foreign subsidiaries aicpa adapt 733704
Translating and Remeasuring Financial Statements of Foreign Subsidiaries [AICPA Adapted]
Wahl Company’s 20X5 consolidated financial statements include two wholly owned subsidiaries, Wahl Company of Australia (Wahl A) and Wahl Company of France (Wahl F). Functional currencies are the U.S. dollar for Wahl A and the European euro for Wahl F.
a. What are the objectives of translating a foreign subsidiary’s financial statements?
b. How are gains and losses arising from the translation or remeasurement of each subsidiary’s financial statements measured and reported in Wahl’s consolidated financial statements?
c. ASC 830 identifies several economic indicators to be considered both individually and collectively in determining the functional currency for a consolidated subsidiary. List three of these indicators.
d. What exchange rate is used to incorporate each subsidiary’s equipment cost, accumulated depreciation, and depreciation expense in Wahl’s consolidated financial statements?