Fundamentals of Advanced Accounting
6th Edition
ISBN: 9780077862237
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 4Q
To determine
Explain how gains and losses on financial statements used to hedge the net investment in a foreign operation reported in the consolidated financial statements.
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Gains and losses on financial instruments used to hedge a foreign operation's net investment are disclosed in the consolidated financial statements in the following manner.
When are foreign currency transaction gains or losses required to be recognized in the financial statements, how are they
to be disclosed and where in the financial statements?
When preparing an income statement, which of the following items would most likely be
classified as other comprehensive income?
A. A foreign currency translation adjustment
B. An unrealized gain on a security held for trading purposes
C. A realized gain on a derivative contract not accounted for as a hedge
D. None of the above
Chapter 8 Solutions
Fundamentals of Advanced Accounting
Ch. 8 - Prob. 1QCh. 8 - What causes balance sheet (or translation)...Ch. 8 - Prob. 3QCh. 8 - Prob. 4QCh. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Prob. 8QCh. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Which translation method does U.S. GAAP require...Ch. 8 - Prob. 13QCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - A foreign subsidiarys functional currency is its...Ch. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 1DYSCh. 8 - Prob. 2DYSCh. 8 - Prob. 3DYSCh. 8 - Prob. 4DYSCh. 8 - Prob. 5DYS
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Similar questions
- Which of the following is NOT a component of Accumulated Other Comprehensive Income? A. Gains or losses on Treasury Stock B. Unrealized holding gains or losses on available-for-sale securities C. Gains or losses from foreign currency translation adjustments D. Gains or losses related to post retirement benefit plans (pensions)arrow_forwardOther comprehensive income includes the following, except A. unrealized gain on derivative contract designated as cash flow hedge B. loss from translating the financial statements of a foreign operation C. actuarial gain on defined benefit plan that is fully recognized D. dividends paid to shareholdersarrow_forwardWhich of the following is not one of the components of other comprehensive income? a. changes in revaluation surplus b. remeasurements of the net defined benefit liability (asset) unrealized gains and losses on FVPL c. translation gains and losses on foreign operation d. effective portion of gains and losses on hedging instruments on a cash flow hedgearrow_forward
- Comprehensive income includes items not included in the computation of net income, such as foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. True Falsearrow_forwardHow should exchange gains or losses resulting from foreign currency transactions be accounted for? Included as component of income from continuing operations for the period in which the rate changes. Included as component of other comprehensive income for the period in which the rate changes. Included in the statement of financial position as a deferred item. Included in net earnings for gains, but deferred for losses.arrow_forwardHow shall an entity subsequently measure financial liabilities? Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Q: Does U.S. GAAP allow fair value option for financial assets and liabilities? Q; What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? Q: How does IFRS 9 address this “own credit” issue?arrow_forward
- describe foreign currency transaction exposure, including accounting for and disclosuresabout foreign currency transaction gains and lossesarrow_forwardExchange differences arising from the translation of financial statements of a foreign operation shall be accounted for as: (using the temporal method) Translation gain or loss as component of other comprehensive income Translation gain or loss as component of profit or loss As valuation adjustment on the company's retained earnings Netted to the balance of foreign exchange gain or lossarrow_forwardExchange differences arising from the translation of financial statements of a foreign operation shall be accounted for as: (using the closing rate method method) Translation gain or loss as component of other comprehensive income Translation gain or loss as component of profit or loss As valuation adjustment on the company's retained earnings O Netted to the balance of foreign exchange gain or lossarrow_forward
- Why is the effective-interest method of amortization required under the International Financial Reporting Standards?arrow_forward2. Which of the following is not included in comprehensive income? a. gains on reissuance of treasury shares b. translation differences related to foreign operations c. fair value gains or losses on FVOCI securities. d. fair value gains or losses on FVPL securities.arrow_forwardComprehensive income comprises factors that are not included in net income, such as foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. True Falsearrow_forward
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