[Anonymous]

Can somebody explain it a bit simpler? When do we use each of these methods? I get so confused because they throw in reporting currency, functional currency or its doing business overseas etc.

Once I know which method to use I know which rates to use and if it goes to Income or OCI. If the question tells me they are using the method I am golden but I get confused deciding which to use.

thanks!!

[Anonymous]

Anyone?

[MRSJLeon917]

Sorry, I have trouble with this myself :/ I kept checking this thread to see if anyone had responded because I am looking for insight into this as well! Guess it's too late for myself since my exam is in a few hours!

AUD (5/25/2012): 91
FAR (10/22/2012): 89
REG (11/28/2012): 89
BEC (01/05/2013): 82
Ethics Exam: 90

IL Licensed CPA - 7/15/2013

A long journey, officially DONE!

[rsoxtim]

I like the way Becker explained it (remeasurement = dysfunctional…that seemed to stick for me for some reason).

Translation only

Let's say Parent A is based in US and records their transactions in USD – their reporting currency is USD. Sub A is based in Germany and reports their transactions in Euros; their functional currency is the Euro. To consolidate, Parent A uses the translation method to consolidate Sub A into Parent A.

Translation and remeasurement

Let's say Parent A also owns Sub B who is based in Germany, keeps their books in Euros but accounts for their transactions in the Mexican Peso since they do most of their business with suppliers and customers in Mexico; their functional currency is the Peso but since they keep their books in Euros, they need to first remeasure their books and then the Parent would use the translation method to consolidate Sub B.

Remeasurement only

Let's say Sub C buys and sells in USD but keeps their books in Euros. Their functional currency is USD which is the same as the reporting currency of the parent. As such, you'd need to remeasure from Euros to USD. Parent can then consolidate without translation.

If it sounds “dysfunctional,” use the remeasurement method.

Hope this helps!

Virginia

F - Passed
R - 1/19/2013
B - February 2013
A - April 2013

[Keely]

I was just about to post a thread related to this. My test is coming up at the end of November and I am on a definite time crunch. I rewatched the Foreign Currency Accounting lecture today and it is like Tim Gearty is speaking gibberish. Should I just move on? I realize everything in the book can be classified as ‘important,' but I do hear of people skipping a topic every now and then, and I am debating on reading it once and moving on, due to time constraints.

BEC: (4/2012) 88
AUD: (5/2012) 91
REG: (8/2012) 82
FAR: (1/2013) 78 🙂

VA CPA #42010

[Anonymous]

Bump. I am struggling with this as well and am really behind on my study schedule. Should I just move on?

[Anonymous]

Might as well throw my hat in this bucket as well. Remeasurement/Translation is a tough topic .

[Anonymous]

for me that is the hardest topic in FAR

hope some one help us

[Anonymous]

https://27.media.tumblr.com/tumblr_lc1tyzxL3w1qalcu6o1_500.gif

[Author]

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