Unformatted text preview: On the balance sheet it would be at the current rate of exchange Q11-7) Foreign currency transaction gains and losses are recognized on the day that the transaction is settled on the balance sheet. They are include in determining the net income for the period in which exchange rate change. And are reported on the income statement as well Q11-8) Q11-9) Transaction exposure can be hedged with financial instruments. Q11-10) When or if the dollar weakens the direct exchange rate will increase. Whenever the dollar strengthens then the exchange rate will do the reverse and decrease. With the weak dollar there will be a gain from exposed net asset and with the strengthen dollar there will be a loss. It is as if the two causes the opposite reaction....
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- Spring '11
- Exchange Rate, United States dollar, direct exchange rate