The Main Objective of Translating the Financial Statements of Foreign

question 20

Multiple Choice

The main objective of translating the financial statements of foreign operations into Australian dollars is to:

• A) compare the performance of the foreign subsidiary's managers with their Australian counterparts
• B) meet the requirements of tax legislation
• C) incorporate the results of the foreign operations into the consolidated financial reports
• D) evaluate the performance of the foreign subsidiary's managers

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Definitions:

Present Value

The value today of an anticipated sum of money or sequence of cash flows, when calculated with a certain return rate.

Future Cash Inflows

Future cash inflows are the expected receipts of cash that a business anticipates receiving from operations, investments, or financing activities in the future.

Manufacturing Flexibility

The ability of a production system to quickly adapt to changes in the types and quantities of products demanded.

Qualitative Characteristic

Attributes that contribute to the usefulness of information presented in financial statements, including relevance and reliability.