Posey Memo.docx - Memo Assume Posey were to obtain an...

  • No School
  • AA 1
  • 2
  • 100% (19) 19 out of 19 people found this document helpful

This preview shows page 1 - 2 out of 2 pages.

Memo: Assume Posey were to obtain an international subsidiary with non-US$ functioning currency. A. The unique calculations required to complete the consolidation worksheet when an international subsidiary with non-US$ functioning currency is obtained is as follows. As the parent company is preparing its consolidated financial statements that includes the financial statements of the foreign subsidiary, it must translate the financial statement of the foreign subsidiary into the reporting currency of the parent. Two methods of currency translation are used, the current rate method and the temporal method. The current rate method is a method of foreign currency translation where most items in the financial statements are translated at the current exchange rate. When a company has operations in other countries, it may need to exchange the foreign currency earned by those foreign operations into the currency used when preparing the company's financial statements — the presentation currency (Hayes, 2019). The temporal method (also known as the historical
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes