Question

In accordance with International Financial Reporting Standards (IFRS), which translation combination would be appropriate for a foreign operation whose functional currency is the currency of the host country (foreign currency)? a. Temporal Separate component of stockholders’ equity. b. Temporal Gain or loss in income statement. c. Current rate Separate component of stockholders’ equity. d. Current rate Gain or loss in income statement.

Answer 1

Answer: D current rate gain or loss in income statement

Explanation: Any currency different from the currency of the country in which an organisation operates is called a foreign currency.

Any transaction carried out in this foreign currency will be exchanged at an agreed rate on the date if the transaction. By this the transaction there will an exchange gain or exchange loss which will be recorded in the income statement of the company .