Greenfield Investments Inc. is a multinational company operating in various countries. The company is preparing its consolidated financial statements for the year ended December 31, 2013. Greenfield Investments Inc. has encountered specific accounting challenges related to its international operations that require your expertise to resolve

Part A Foreign Currency Transactions

During the year, Greenfield Investments Inc. engaged in several transactions denominated in foreign currencies. The company made purchases from a supplier in Europe and sold goods to customers in Asia Explain the accounting treatment of these foreign currency transactions according to the accounting standards (eg, ASC 830 in the United States). Discuss the appropriate method for translating these transactions into the company's functional currency (assuming the US dollar is the functional currency) and the impact of exchange rate fluctuations on the company's financial statements

Part B International Taxation

Greenfield Investments Inc. operates subsidiaries in multiple countries, each with different tax regulations. The company is evaluating its deferred tax assets and liabilities related to its international operations. Describe how deferred taxes are accounted for in accordance with the relevant accounting standards (eg. (AS 12) Discuss the factors that influence the recognition and measurement of deferred tax assets and liabilities, especially considering the differences in tax rates and regulations across various jurisdictions. Provide journal entries, if necessary, to account for deferred taxes arising from temporary differences in the international subsidiaries

This question focuses on foreign currency transactions and international taxation, challenging candidates to apply their knowledge of accounting standards and principles in the context of a multinational corporation. Candidates are expected to explain the relevant concepts, discuss the appropriate accounting treatments, and demonstrate their ability to handle complex scenarios involving international operations