On December $18,2024,$ Stephkado Corporation acquired $100$ percent of a Swiss

company for $4\mathrm{.}0$ million Swiss francs $($CHF$),$ which is indicative of book and fair value. At

the acquisition date, the exchange rate was $$1\mathrm{.}00=CHF1.$ On December $18,2024,$ the

book and fair values of the subsidiary's assets and liabilities were as follows:

Stephkado prepares consolidated financial statements on December $31,2024.$ By that

date, the Swiss franc has appreciated to $$1\mathrm{.}10=CHF1.$ Because of the year$-$end holidays,

no transactions took place prior to consolidation. Property, plant, and equipment is

depreciated using a units$-$of$-$production method, so no depreciation is required from

December $18$ to December $31.$ The Swiss subsidiary has no revenues and no expenses

from December $18$ to December $31,$ and its book value is unchanged from December $18$

to December $31.$

Required:

a$.$ Determine the translation adjustment to be reported on Stephkado's December $31,$

$2024,$ 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 Stephkado's $2024$

consolidated net income, assuming that the U$.$S$.$ dollar is the functional currency. What

is the economic relevance of this remeasurement gain or loss?

Answer is complete but not entirely correct.