Under FASB ASC 830, Foreign Currency Matters, When the Temporal

question 39

Multiple Choice

Under FASB ASC 830, Foreign Currency Matters, when the temporal method is used, how are translation adjustments treated in the consolidated financial statements?

• A) As gains or losses on the current period consolidated income statement
• B) As prior period adjustments to retained earnings of the parent
• C) As part of other comprehensive income on the consolidated balance sheet
• D) None of the above because the temporal method is not allowed under FASB ASC 830.

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Definitions:

Interest Rates

The percentage at which interest is charged or paid for the use of money.

Federal Reserve System

The Federal Reserve System, which is the main banking authority in the U.S., oversees monetary policy.

Elastic Currency

A currency system that can expand or contract in supply in response to economic needs, often managed by a central banking authority.

Nation's Banks

Banks that operate within a specific country, serving its economy and citizens.