The Net Assets of a Foreign Operation at 30 June

question 25

Multiple Choice

The net assets of a foreign operation at 30 June 2005 are constituted as assets of US$400,000 and liabilities of US$250,000.The parent entity purchased the foreign subsidiary on 1 July 2002.Exchange rate information is as follows: The foreign operation has not traded during the year ended 30 June 2005,so the net assets remained unchanged during the period.What is the parent entity's foreign currency exposure for the year ended 30 June 2005?

• A) Foreign exchange gain $A197,185.
• B) Foreign exchange gain $A20,610.
• C) Foreign exchange gain $A342,310.
• D) Foreign exchange loss $A6,002.
• E) None of the given answers.

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Definitions:

Externally Imposed

Describes regulations, conditions, or influences applied from outside an individual or system, often without the person's or system's control.

Piaget

A Swiss psychologist known for his pioneering work in the field of cognitive development, particularly his theory of cognitive development stages.

Social Regulations

The rules and norms established by a society that govern behavior and processes within that society.

Moral Rules

Guidelines for behavior that are considered right and wrong within a society or group, often based on ethical beliefs.