Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in the local currency, and the U.S. dollar is the functional currency, then

If a firm's balance sheet has an equal amount of exposed foreign currency assets and liabilities and the firm translates by the temporal method, then

A Canadian subsidiary of a U.S. parent firm is instructed to bill an export to the parent in U.S. dollars. The Canadian subsidiary records the accounts receivable in Canadian dollars and notes a profit on the sale of goods. Later, when the U.S. parent pays the subsidiary the contracted U.S. dollar amount, the Canadian dollar has appreciated 10% against the U.S. dollar. In this example, the Canadian subsidiary will record a

It is possible that efforts to decrease translation exposure may result in an increase in transaction exposure.

Translation gains and losses can be quite different from operating gains and losses

If the European subsidiary of a U.S. firm has net exposed assets of euro 500,000, and the euro increases in value from $1.30/euro to $1.35/euro the U.S. firm has a translation ………. .

Under the current rate method, translation gains of losses are reported in an equity reserve account called ………. .

If the British subsidiary of a European firm has net exposed assets of £250,000, and the pound increases in value from euro 1.40/£ to euro 1.45/£, the European firm has a translation………. .

As required by FASB-52, which exchange rate is required to be used to translate assets and liabilities of a foreign entity from its functional currency to the reporting currency?

Gains from forward contracts to hedge translation exposure are taxable whereas losses from hedging translation exposure are not.

Gains from forward contracts to hedge translation exposure are not taxable whereas losses from hedging translation exposure are.