Assessment 3: foreign currency | Accounting homework help

 

Complete two exercises in accounting for foreign currency transactions and translating financial statements from a foreign currency into U.S. dollars.

Introduction

In today’s global economy, many companies conduct business in currencies other than the currency in which they report. Goods are often imported or exported with prices stated in a foreign currency. For the purpose of reporting, foreign currency balances must be stated in the company’s reporting currency. That is done by multiplying the foreign currency by an exchange rate.

To restate foreign currency balances, accountants consider two questions:

  1. What is the appropriate exchange rate for converting foreign currency balances?
  2. How does one account for changes in the exchange rate?

Companies often engage in foreign currency hedging activities in order to avoid any adverse impacts of exchange rate changes. As a result, accountants must determine how to account for these hedging activities.

Many U.S. companies have significant financial interests in foreign countries. As a result, the way in which foreign currency is translated into U.S. dollars is significant. The two major issues related to the translation process are:

  1. Which translation method to use.
  2. Where to report the resulting translation adjustment in the consolidated financial statements.

Translation methods differ based on whether accounts are translated at the current exchange rate or at historical rates. Accounts that are translated at the current exchange rate are exposed to translation adjustment. Different translation methods result in different concepts of balance sheet exposure.

Preparation

The following resources are required to complete the assessment.

Complete the problems in the Assessment 3 Problems document using the related template, both of which are linked in the Required Resources for this assessment. All financial information and applicable instructions are provided.

Problem 1: Foreign Currency Borrowing
  • Journalize foreign currency borrowing transactions.
  • Determine the effective cost of borrowing.
Problem 2: Financial Statement Translation
  • Prepare financial statements in LCU units.
  • Translate financial statement amounts to U.S. dollars.
  • Compute translation adjustments.

Competencies Measured

By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:

  • Competency 2: Evaluate the influence of global money markets on financial statements.
    • Journalize foreign currency borrowing transactions.
    • Determine the effective cost of borrowing.
    • Prepare financial statements in LCU units.
    • Translate financial statement amounts to U.S. dollars.
    • Compute translation adjustments.
  • Competency 5: Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.
    • Communicate results from accounting calculations accurately and clearly.







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10