You should refer to the FASB Accounting Standards Codification (FASB ASC), specifically, when answering some of the questions below:
- Under what circumstance(s) would the amount included in the foreign currency translation account be recorded in the Income Statement instead of the Statement of Other Comprehensive Income?
- Under what circumstance(s) would it potentially make sense for a Company to consider hedging the amount included in the Statement of Other Comprehensive Income for Foreign Currency Translation? Be specific.
- Explain in a few sentences how the accounting for foreign currency translation differs for subsidiaries of a US Parent Company operating in a hyperinflationary environment which are consolidated into the Parent Company’s financial statements.
- For the accumulated foreign currency translation balance which your Assignment in Connect arrived at, is the amount of the translation adjustment in the current year a debit or a credit, and what does that mean with regards to the movement of foreign exchange during the period against the US Dollar? Be specific.
