The functional currency method-foreing branches, Financial Accounting

The functional currency method (formerly temporal method)

Under this method, the branch is considered to be an extension of the head office and this is reflected by the trading arrangement between the head office and branch.

In most cases the head office will send goods to the branch and the branch will remit the proceeds on sale of these goods to the head office. Any exchange gain or loss arising from translating the results of the branch is treated as profit and loss item reported as an income or an expense.

Posted Date: 12/12/2012 2:00:09 AM | Location : United States







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