Under the Current Rate Method of Translating Foreign Currency Financial

question 37

Multiple Choice

Under the current rate method of translating foreign currency financial statements, what is the amount of the balance sheet exposure?

• A) It is equal to the amount of assets recorded by the subsidiary.
• B) It is equal to the amount of liabilities recorded by the subsidiary.
• C) It is equal to the foreign operation's net asset position.
• D) It is equal to total assets plus total liabilities.

---

Definitions:

Proportionate Interest Goodwill Method

An accounting method used to calculate goodwill in the consolidation of financial statements, based on the parent company's proportionate share in the net assets of the subsidiary.

Goodwill Impairment Losses

are losses recognized when the carrying amount of goodwill exceeds its recoverable amount.

Indirect NCI

Refers to a non-controlling interest in an entity that is owned through another subsidiary rather than directly.

Allocation of the Dividend

The process of distributing a portion of a company's earnings, decided by the board of directors, to its shareholders in proportion to their shareholding.