Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
On December 1 8 , 2 0 2 0 , Stephanie Corporation acquired 1 0 0 percent of a Swiss company for 4 . 0
On December Stephanie Corporation acquired percent of a Swiss company for million Swiss francs CHF which is indicative of book and fair value. At the acquisition date, the exchange rate was $ CHF On December the book and fair values of the subsidiary's assets and liabilities were as follows: Stephanie prepares consolidated financial statements on December By that date, the Swiss franc has appreciated to $ CHF Because of the yearend holidays, no transactions took place prior to consolidation. a Determine the translation adjustment to be reported on Stephanie's December consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary's functional currency. What is the economic relevance of this translation adjustment? b Determine the remeasurement gain or loss to be reported in Stephanie's consolidated net income, assuming that the US dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?
On December Stephanie Corporation acquired percent of a Swiss company for million Swiss francs CHF which is
indicative of book and fair value. At the acquisition date, the exchange rate was $ CHF On December the book and
fair values of the subsidiary's assets and liabilities were as follows:
Stephanie prepares consolidated financial statements on December By that date, the Swiss franc has appreciated to $
CHF Because of the yearend holidays, no transactions took place prior to consolidation.
a Determine the translation adjustment to be reported on Stephanie's December consolidated balance sheet, assuming that
the Swiss franc is the Swiss subsidiary's functional currency. What is the economic relevance of this translation adjustment?
b Determine the remeasurement gain or loss to be reported in Stephanie's consolidated net income, assuming that the US
dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started