[PleasePass]

This is one of the subjects I have simply just been stuck on for quite some time. Is there any easy way to explain it? I guess I really just don’t understand it at all. I’ve watched the lecture on it 3 or 4 times and still do not get it. All I see that in one case you start with the income statement first and in another case you start with the balance sheet first. Is there any easy way to explain this and remember the rates you are supposed to use? (This is in section F-2 for those using Becker)

FAR (10/15/10) = 94
AUD (11/24/10) = 89
BEC (5/20/11) = 87
REG (8/23/11) = 78

[killaking]

just read it and know mostly terms as you can see that its not a really big section which means it isn't usually tested

FAR: 7/17/10 missed exam FML reschedule 8/29/10-77 EPIC!
REG: 5/31/11-73 SMH, 8/31/11-85
BEC: 4/15/10-72 : retake 10/3/10-80
AUD: 11/28/10-74, 02/27/11-71 FML, 8/1/11-80
Ethics 10/22/22-80, retake 11/28/11 - 88

[potatogun]

Just memorize what types of scenarios would necessitate remeasurement or translation. And understand what functional currency is.

FAR 92 - AUD 91 - REG 94 - BEC 86

[StudyInRI]

Translating is like translating Spanish to English… So it'd be translating financial statements in a different country (say the Euro) to the US Dollar. If you're translating — what happened in the past (equity accounts) are stated at historical cost. Assets and liabilities use the current exchange rate. As revenues and expenses occur at different times during the year, you should use some type of weighted average rate. The translation gain then goes in to P U (F) E.

Remeasurement isn't as common, but let's say you were doing business in an African country where there is a lot of inflation. So $1 today is worth only half of that tomorrow, and even less tomorrow. As you can see, there's a lot going on, so you should remeasure everything. As this has to deal primarily with inflation, which would somehow mess up your income statement, that's where you'd want to recognize the currency exchange gain/loss.

Unfortunately I have no fun way of remembering it. But sometimes applying a situation can help. Half the battle is grasping the concept, and that isn't always easy… Good luck!

REG - 97
BEC - 82
FAR - 86
AUD - 96 ... DONE!

[stufico]

Remember Remeasurement always hits the income statement to get net income and Translation hits the equity section of the balance sheet and is only reported in OCI to find comprehensive income.

Remeasurement happens when you have individual transactions outside of your functional currency. Like a US dollar based company may have bought a machine on credit for 5,000 Mexican pesos. If the current rate was 5 pesos:1 and then changed to 6:1 you would record a gain on remeasurement because you could pay the machine off with less dollars.

Translation is when you have a subsidiary that has a separate functional currency and when you go to consolidate the financial statements you have a gain from translation.

Just remember the acronyms:

RI

TBS

RI for Remeasurement on the Income statement

TBS for Translation on the Balance Sheet/Other Comprehensive Income

You can also use TOCI If you remember Toke a little easier than the tv station TBS.

Good Luck!

[PleasePass]

Thanks stufico that actually really helps me! Now time to cram! 29 hours till exam time!

FAR (10/15/10) = 94
AUD (11/24/10) = 89
BEC (5/20/11) = 87
REG (8/23/11) = 78

[Author]

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