Foreign operation functional currency

Assignment Help Accounting Basics
Reference no: EM1344683

Sydney Corporation, an Australian-based multinational, borrowed 10,000,000 euros from a German lender at the beginning of calendar year when exchange rate was EUR.60 = AUD1. Before repaying this one-year loan, Sydney Corporation learns that the Australian dollar had depreciated to EUR.55 = AUD1. It also discovers that its Frankfurt subsidiary has an exposed net asset position of EUR 30,000,000, which will produce a translation gain upon consolidation. What is the exchange gain or loss that will be reported in consolidated income if (a) the euro is the foreign operation's functional currency? (b) The Australian dollar is the foreign operation's functional currency?

Reference no: EM1344683

Questions Cloud

Discusses the principles of financial accounting : Write a paper that discusses the principles of financial accounting. No references or specific style is required.
Continued existence of countertrade : How do you describe the continued existence of counter trade? Under what scenarios may its popularity increase still further by the year 2015?
What is the mass of block of ice : 0.20g of hydrogen gas are held in a rigid container. The temperature of the gas is changed from 50 K to 80 K. How much heat is needed.
Describe briefly how consumers and incumbent firms : describe briefly how consumers and incumbent firms are influenced by these externalities.
Foreign operation functional currency : Sydney Corporation, an Australian-based multinational, borrowed 10,000,000 euros from a German lender at the beginning of calendar year when exchange rate was EUR.60 = AUD1.
Find myr position should be hedged or not : As you are the finance manager of Aussie Biscuits you are worried that the recent significant appreciation of the Australian dollar may continue in the near future and you are considering whether this MYR position should be hedged or not.
Explaining significance of automating boundary : In System Analysis and Design: Automation Boundary - Why is the automating boundary significant?
Illustrate what is james opportunity cost of producing : illustrate what is james opportunity cost of producing chickens which person has an absolute advantage in which activities which person has a comparative.
How far away from the earth must this satellite be placed : The satellite has an orbital period around the Earth that is the similar as that of the Moon, 27.3 days. How far away from the Earth must this satellite be placed.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Compute the equivalent units of production

Evaluate the equivalent units of production for each cost element in the Creation Dep. for the month just ended. Find out the average cost per equivalent unit for each cost element.

  Finding the balance in right-of-use asset

Warren Co. recorded a right-of-use asset of $900,000 in 8-year lease under which no profit was recorded at commencement by lessor-The balance in right-of-use asset after 2 years will be:

  Prepare ledger accounts

Explain what you understand by the term depreciation and it's relevance in the preparation of financial statements, Prepare ledger accounts, Prepare an income statement, Prepare a balanced sheet

  Calculate the amount of income from partnership

Compute the amount of income from the partnership which Potter should report for his tax year ended December 31, 2012.

  Fair value option of accounting

What financial instruments (financial assets and financial liabilities) are not eligible for an entity to use the fair value option of accounting?

  Implementing the change to equity method

Gerken Company concluded at the beginning of 2013 that the company's ownership interest in DillCo had increased to the point that it became appropriate to begin using the equity method to account for the investment.

  Stacks of inventory

As Jonah wades through huge piles of the inventory and questions the team on operations, he quickly identifies the problem. Which of the implemented methods above does Jonah contribute to stacks of inventory?

  Requirements of incorporating the business

Discuss in detail the requirements of incorporating the business, the advantages and disadvantages, and provide JJ with recommendations.

  Question on securities and exchange commission

What is the Securities and Exchange Commission? How does it affect financial decision-making? What constraints might it put on the company?

  Determining the losses claim

During 2012, Lorraine sold the following assets: business equipment for a $8,000 loss, stock investment for a $10,000 loss, and her principal residence for a $26,000 loss. how much of these losses may Lorraine claim on her 2012 return?

  Set up necessary t accounts

A business paid 100 to cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T accounts and show how this transaction would be recorded directly to those accounts

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd