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International Accounting Ch. 8

Across
The second problem is the gain or loss may not be _____ with economic reality
Which perspective reflects the integrated nature of the foreign subsidiary with its U.S. parent, the translation process should create a set of U.S.-dollar translated financial statements as if the dollar had actually been used by the foreign subsidiary.
(local-currency perspective) For this type of entity, the FASB determined that which methodology is appropriate?
The ___ step in translating foreign currency financial statements is the determination of the functional currency.
The primary currency of the foreign entity’s operating environment. It can be either the parent’s currency (US$) or a foreign currency (generally the local currency).
A country is defined as a highly infl ationary economy if its cumulative three-year inflation exceeds?
______ Sheet exposure can be hedged through the use of a derivative financial instrument such as a forward contract or foreign currency option, or through the use of a nonderivative hedging instrument such as a foreign currency borrowing.
Produce a set of parent currency translated financial statements as if the foreign subsidiary had actually used the parent currency in conducting its operations.
Down
Where Cash + Receivables > Payables → Net asset exposure; Cash + Receivables < Payables → Net liability exposure
Which translation adjustment is the alternative to reporting the translation adjustment as a gain or loss in net income is to include it in stockholders’ equity as a component of other comprehensive income.
IAS __ provides a hierarchy of primary and secondary factors to be considered in determining the functional currency of a foreign subsidiary.
The first of two conceptual _________ with treating translation adjustments as gains/losses in net income is the gain or loss is unrealized; that is, there is no accompanying cash inflow or outflow.
After releasing two Exposure _________ proposing new translation rules, the FASB finally issued SFAS 52, Foreign Currency Translation, in 1981. This resulted in a complete overhaul of U.S. GAAP with regard to foreign currency translation.
Which method follows these rules: current assets and current liabilities are translated at the current exchange rate
provides a list of indicators to guide parent company management in its determination of a foreign entity’s functional currency.