what is Exchange Rate and how the income, assets and liabilities of the companies involved in the foreign transactions are impacted because of the fluctuations in exchange rates.
Exchange rate is the value of one currency for the purpose of conversion to... View the full answer
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Exchange rate refers to the value... View the full answer
- Net assets (assets minus liabilities) are at the exchange rates in effect on the balance sheet date. Income statement items are at the weighted average rate in effect for the year except for material items that must be translated at the transaction date. Stock accounts are at the historical rate. Retained earnings and other equity items are at historical rates accumulated over time. This includes the payment of dividends. The CTA in OCI is a plug figure to make the translated debits equal credits. - See more at: http://www.journalofaccountancy.com/issues/2008/jul/currencytranslationadjustments.html#sthash.lTpIYNRE.dpuf
- Feb 08, 2016 at 6:36pm