Finlandiva, a furniture manufacturer based in Finland, is owned by U.S.-based Couch Potato, Inc. Finlandivas balance sheet

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Finlandiva, a furniture manufacturer based in Finland, is owned by U.S.-based Couch Potato, Inc. Finlandiva’s balance sheet at the current exchange rate of $1.00/€ is shown in the following table.

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a. Identify Couch Potato’s exposed assets, exposed liabilities, and net exposed assets under ASC 830–30 Translation of Financial Statements.

b. Identify the impact of a 20 percent depreciation of the euro on Couch Potato’s consolidated balance sheet.  

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