Which of the Following Correctly Addresses How International Accounting Standards

question 47

Multiple Choice

Which of the following correctly addresses how international accounting standards differ from U.S.GAAP as they pertain to translation of foreign financial statements using the current or functional method?

• A)​The difference resulting from translation is recognized in income rather than other comprehensive income.
• B)​The methodology varies in that historical rates are used for certain nonmonetary assets.
• C)The difference resulting from translation may be recognized in income for reasons besides the parent's disposal of the foreign entity.​
• D)There are no differences.​

---

Definitions:

Precautionary Motive

The desire to hold cash or other liquid assets to meet unexpected needs and financial emergencies.

Financial Slack

The availability of excess funds or resources in a company that allows for flexibility in operations, strategic investments, or weathering financial uncertainties without immediate financial stress.

Keynes

Refers to John Maynard Keynes, a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and economic policies of governments.

Transactions Reasons

The underlying motives or justifications for conducting financial transactions or business operations.