Gains from Remeasuring a Foreign Subsidiary's Financial Statements from the Local

question 22

Multiple Choice

Gains from remeasuring a foreign subsidiary's financial statements from the local currency,which is not the functional currency,into the company's functional currency should be reported as a(n)

• A) Deferred foreign exchange gain.
• B) Part of continuing operations.
• C) Separate component of stockholders' equity.
• D) Extraordinary item, net of income taxes.

---

Definitions:

External Financing

Funds raised from outside the company, typically through borrowing, issuing equity, or receiving grants, as opposed to internal funds generated from operations.

Full Capacity

The maximum level of output that a company can sustain over a period of time without increasing costs.

Total Assets

The sum of all assets owned by an entity, including both current and non-current assets.

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings without needing to issue new equity or take on additional debt.