國際會計學(xué)課后答案

國際會計學(xué)課后答案【篇一：國際會計第七版英文版課后答案(第六章)】heforeignexchangespotmarket,currenciesboughtandsoldmustbedeliveredimmediately,normallywithin2businessdays.thusasingaporeantouristbuyingu.s.dollarsattheairportbeforeboardingaplanefornewyorkwouldhandoversingaporedollarsandimmediatelyreceivetheequivalentamountinu.s.dollars.theforwardmarkethandlesagreementstoexchangeafixedamountofonecurrencyforanotheronanagreeddateinthefuture.forexample,afrenchmanufacturerexportinggoodsinvoicedineurostoajapaneseimporteron60-daycredittermswouldbuyaforwardcontracttosellyenforeuros2monthsinthefuture.transactionsintheswapmarketinvolvethesimultaneouspurchase(orsale)ofonecurrencyinthespotmarketandthesale(orpurchase)ofthesamecurrencyintheforwardmarket.thus,acanadianinvestorwishingtotakeadvantageofhigherinterestrateson6-monthtreasurybillsintheunitedstateswouldbuyu.s.dollarswithcanadiandollarsinthespotmarketandinvestintheunitedstates.toguardagainstafallinthevalueoftheu.s.dollarbeforematurity(whentheu.s.dollarproceedsareconvertedbacktocanadiandollars),thecanadianinvestorwouldsimultaneouslyenterintoaforwardcontracttosellu.s.dollarsforcanadiandollars6monthsinthefutureattodaysforwardexchangerate.thequestionreferstoalternativeexchangeratesthatareusedtotranslateforeignfinancialstatements.thecurrentrateistheexchangerateatthefinancialstatementdate.itissometimescalledtheyear-endorclosingrate.thehistoricalrateistheexchangerateatthetimeoftheunderlyingtransaction.theaveragerateistheaverageofvariousexchangeratesduringafiscalperiod.sincetheaverageratenormallyisusedtotranslateincomestatementitems,itisoftenweightedtoreflectanyseasonalchangesinthevolumeoftransactionsduringtheperiod.translationgainsandlossesdonotoccurifexchangeratesdonotchange.however,ifexchangerateschange,theuseofcurrentandaverageratescausestranslationgainsandlosses.thesedonotoccurwhenthehistoricalrateisusedbecausethesame(constant)hisexample,themexicanaffiliatescanadiandollarloanisdenominatedincanadiandollars.however,becausethemexicanaffiliate 'functionalcurrencyisu.s.dollars,thepesoequivalentofthecanadiandollarborrowingwouldberemeasuredinu.s.dollarspriortoconsolidation.ifthemexicanaffiliate'sfunctionalcurrencywerethepeso,thecanadiandollarloanwouldberemeasuredinpesosbeforebeingtranslatedtou.s.dollars.atransactiongainorlossoccurswhenaforeigncurrencytransaction,e.g.,aforeigncurrencyborrowing,hiscasethereisanexchangeofonecurrencyforanother.atranslationgainorloss,ontheotherhand,issimplytheresultofarestatementprocess.thereisnophysicalexchangeofcurrenciesinvolved.itisnotpossibletocombine,add,orsubtractaccountingmeasurementsexpressedindifferentcurrencies;thus,itisnecessarytotranslatethoseaccountsthataremeasuredordenominatedinaforeigncurrencyintoasinglereportingcurrency.foreigncurrencytranslationcaninvolverestatementorremeasurement.inrestatement,thelocal(functional)currencyiskeptastheunitofmeasure;thatis,thetranslationprocessmultipliesthefinancialresultsandrelationshipsinthelocalcurrencyaccountsbyaconstant,thecurrentincontrast,remeasurementtranslateslocalcurrencyresultsasiftheunderlyingtransactionshadtakenplaceinthereporting(functional)currencyoftheparentcompany;forexample,itchangestheunitofmeasureofaforeignsubsidiaryfromitslocal(foreign)currencytotheu.s.dollar.majoradvantagesandlimitationsofeachofthemajortranslationmethodsfollow.currentratemethodadvantages:retainstheinitialrelationshipsintheforeigncurrencystatements.simpletolimitations:violatesthebasicpurposeofconsolidation,whichistopresenttheresultsofaparentanditssubsidiariesasiftheywereasingleentity.inconsistentwithhistoricalcost.presumesthatalllocalassetsandliabilitiesaresubjecttoexchangerisk.whilestockholdersequityadjustmentsshieldanmncsbottomlinefromtranslationgainsandlosses,suchadjustmentscoulddistortcertainfinancialratiosandbeconfusing.current-noncurrentmethodadvantages:a. distortionsintranslatedgrossmarginsarereducedasinventoriestranslatedatthecurrentrate.b.reportedearningsareshieldedfromthedistortingeffectsofcurrencyfluctuationsasexcesstranslationgainsaredeferredandusedtooffsetfuturetranslationlosses.limitations:usesbalancesheetclassificationasbasisfortranslation.assumesallcurrentassetsareexposedtoexchangeriskregardlesstheirform.assumeslong-termdebtisshelteredfromexchangeratemonetary-nonmonetarymethodadvantages:a.reflectschangesindomesticcurrencyequivalentoflongtermdebtontimelybasis.limitations:assumesthatonlymonetaryassetsandliabilitiesaresubjecttoexchangeraterisk.exchangeratechangesdistortprofitmarginsassalestransactedatcurrentpricesarematchedagainstcostofsalesmeasuredathistoricalprices.usesbalancesheetclassificationasbasisfortranslation.nonmonetaryitemsstatedatcurrentmarketvaluesaretranslatedhistoricalrates.temporalmethodadvantages:theoreticallyvalid:compatiblewithanyaccountingmeasurementmethod.hastheeffectoftranslatingforeignsubsidiariesoperationsasiftheywereoriginallytransactedinthehomecurrency,whichisdesirableforforeignoperationsthatareextensionsoftheparent'sactivities.limitation:a.acompanyincreasesitsearningsvolatilitybyrecognizingtranslationgainsandlossescurrently.inarguingforonetranslationmethodoveranother,yourstudentsshouldeventuallyrealizethat,inthepresentstateoftheart,thereisprobablynoonetranslationmethodthatisappropriateforallcircumstancesinwhichtranslationsoccurandforallpurposesthattranslationserves.itisprobablymorefruitfultohavestudentsidentifycircumstancesinwhichtheythinkonetranslationmethodismoreappropriatethananother.thecurrentratemethodisappropriatewhentheforeignentitybeingconsolidatedislargelyindependentoftheparentcompany.conditionswhichwouldjustifythismethodologyiswhentheforeignaffiliatetendstogenerateandexpendcashflowsinthelocalcurrency,sellsaproductlocallysothatitssellingpriceislargelyinsulatedfromexchangeratechanges,incursexpenseslocally,financesitsselflocallyanddoesnothaveverymanytransactionswiththeparentcompany.incontrast,thetemporalmethodseemsappropriateinthoseinstanceswhentheforeignaffiliate 'soperantsioareintegrallyrelatedtotheparentcompany.conditionswhichwouldjustifyuseofthetemporalmethodarewhentheforeignaffiliatetransactsbusinessintheparentcurrencyandremitssuchcashflowstotheparentcompany,sellsaproductlargelyintheparentcountryandwhosesellingpriceissensitivetoexchangeratechanges,sourcesitsfactorinputsfromtheparentcompany,receivesmostofitsfinancingfromtheparentandhasalargetwowayflowoftransactionswithit.thehistoryofforeigncurrencytranslationintheunitedstatessuggeststhatthedevelopmentofaccountingprinciplesdoesnotdependontheoreticalconsiderationssomuchasonpolitical,institutional,andeconomicinfluencesthataffectaccountingstandardsetting.itmaybemorerealistictorecognizethattheoreticallysoundsolutionsareimpossibleaslongaspolicyprescriptionsareevaluatedonpracticalgrounds.withoutspecificchoicecriteriaderivedfrominvestordecisionmodels,itisfruitlesstoarguetheconceptualmeritsofcompetingaccountingtreatments.itisfarmoreproductivetoadmitthatforeigncurrencytranslationchoicesaresimplyarbitrary.readersofconsolidatedfinancialstatementsshouldknowthattheforeigncurrencytranslationmethodusedisoneofseveralalternatives,andthisshouldbedisclosed.thisapproachismoreopenandreducesthechancethatreadersdrawmisleadinginferences.foreigninflation,inparticular,thedifferentialrateofinflationbetweenthecountryinwhichasubsidiaryislocatedandthecountryofitsparentdeterminesforeignexchangerates.theserates,inturn,heunitedkingdom,financialstatementsofaffiliatesdomiciledinhyperinflationaryenvironmentsmustfirstbeadjustedtocurrentpricelevelsandthentranslatedusingthecurrentrate;intheunitedstates,thetemporalmethodwouldbeemployed.thesecondpartofthisquestionisdesignedtogetstudentsfromabroadtofindoutwhatcompaniesinthe