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国际会计学课后答案【篇一：国际会计第七版英文版课后答案(第六章)】foreigncurrencytranslationdiscussionquestionssolutions1.foreigncurrencytranslationistheprocessofrestatingaforeignaccountbalancefromonecurrencytoanother.foreigncurrencyconversionistheprocessofphysicallyexchangingonecurrencyforanother.2.intheforeignexchangespotmarket,currenciesboughtandsoldmustbedeliveredimmediately,normallywithin2businessdays.thusasingaporeantouristbuyingu.s.dollarsattheairportbeforeboardingaplanefornewyorkwouldhandoversingaporedollarsandimmediatelyreceivetheequivalentamountinu.s.dollars.theforwardmarkethandlesagreementstoexchangeafixedamountofonecurrencyforanotheronanagreeddateinthefuture.forexample,afrenchmanufacturerexportinggoodsinvoicedineurostoajapaneseimporteron60-daycredittermswouldbuyaforwardcontracttosellyenforeuros2monthsinthefuture.transactionsintheswapmarketinvolvethesimultaneouspurchase(orsale)ofonecurrencyinthespotmarketandthesale(orpurchase)ofthesamecurrencyintheforwardmarket.thus,acanadianinvestorwishingtotakeadvantageofhigherinterestrateson6-monthtreasurybillsintheunitedstateswouldbuyu.s.dollarswithcanadiandollarsinthespotmarketandinvestintheunitedstates.toguardagainstafallinthevalueoftheu.s.dollarbeforematurity(whentheu.s.dollarproceedsareconvertedbacktocanadiandollars),thecanadianinvestorwouldsimultaneouslyenterintoaforwardcontracttosellu.s.dollarsforcanadiandollars6monthsinthefutureattodaysforwardexchangerate.3.thequestionreferstoalternativeexchangeratesthatareusedtotranslateforeignfinancialstatements.thecurrentrateistheexchangerateatthefinancialstatementdate.itissometimescalledtheyear-endorclosingrate.thehistoricalrateistheexchangerateatthetimeoftheunderlyingtransaction.theaveragerateistheaverageofvariousexchangeratesduringafiscalperiod.sincetheaverageratenormallyisusedtotranslateincomestatementitems,itisoftenweightedtoreflectanyseasonalchangesinthevolumeoftransactionsduringtheperiod.translationgainsandlossesdonotoccurifexchangeratesdonotchange.however,ifexchangerateschange,theuseofcurrentandaverageratescausestranslationgainsandlosses.thesedonotoccurwhenthehistoricalrateisusedbecausethesame(constant)rateisusedeachperiod.4.inthisexample,themexicanaffiliatescanadiandollarloanisdenominatedincanadiandollars.however,becausethemexicanaffiliate’sfunctionalcurrencyisu.s.dollars,thepesoequivalentofthecanadiandollarborrowingwouldberemeasuredinu.s.dollarspriortoconsolidation.ifthemexicanaffiliate’sfunctionalcurrencywerethepeso,thecanadiandollarloanwouldberemeasuredinpesosbeforebeingtranslatedtou.s.dollars.5.atransactiongainorlossoccurswhenaforeigncurrencytransaction,e.g.,aforeigncurrencyborrowing,issettledatadifferentexchangeratethanthatwhichprevailedwhenthetransactionwasoriginallyincurred.inthiscasethereisanexchangeofonecurrencyforanother.atranslationgainorloss,ontheotherhand,issimplytheresultofarestatementprocess.thereisnophysicalexchangeofcurrenciesinvolved.6.itisnotpossibletocombine,add,orsubtractaccountingmeasurementsexpressedindifferentcurrencies;thus,itisnecessarytotranslatethoseaccountsthataremeasuredordenominatedinaforeigncurrencyintoasinglereportingcurrency.foreigncurrencytranslationcaninvolverestatementorremeasurement.inrestatement,thelocal(functional)currencyiskeptastheunitofmeasure;thatis,thetranslationprocessmultipliesthefinancialresultsandrelationshipsinthelocalcurrencyaccountsbyaconstant,thecurrentrate.incontrast,remeasurementtranslateslocalcurrencyresultsasiftheunderlyingtransactionshadtakenplaceinthereporting(functional)currencyoftheparentcompany;forexample,itchangestheunitofmeasureofaforeignsubsidiaryfromitslocal(foreign)currencytotheu.s.dollar.7.majoradvantagesandlimitationsofeachofthemajortranslationmethodsfollow.currentratemethodadvantages:a.retainstheinitialrelationshipsintheforeigncurrencystatements.b.simpletoapply.limitations:a.violatesthebasicpurposeofconsolidation,whichistopresenttheresultsofaparentanditssubsidiariesasiftheywereasingleentity.b.inconsistentwithhistoricalcost.c.presumesthatalllocalassetsandliabilitiesaresubjecttoexchangerisk.d.whilestockholdersequityadjustmentsshieldanmncsbottomlinefromtranslationgainsandlosses,suchadjustmentscoulddistortcertainfinancialratiosandbeconfusing.current-noncurrentmethodadvantages:a.distortionsintranslatedgrossmarginsarereducedasinventoriesandtranslatedatthecurrentrate.b.reportedearningsareshieldedfromthedistortingeffectsofcurrencyfluctuationsasexcesstranslationgainsaredeferredandusedtooffsetfuturetranslationlosses.limitations:a.usesbalancesheetclassificationasbasisfortranslation.b.assumesallcurrentassetsareexposedtoexchangeriskregardlessoftheirform.c.assumeslong-termdebtisshelteredfromexchangeraterisk.monetary-nonmonetarymethodadvantages:a.reflectschangesindomesticcurrencyequivalentoflong-termdebtonatimelybasis.limitations:a.assumesthatonlymonetaryassetsandliabilitiesaresubjecttoexchangeraterisk.b.exchangeratechangesdistortprofitmarginsassalestransactedatcurrentpricesarematchedagainstcostofsalesmeasuredathistoricalprices.c.usesbalancesheetclassificationasbasisfortranslation.d.no