1. On December 10, 2019, Glass Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss Frans (CHF), which is indicative of book and fair value. At the acquisition date, the subsidarys assets and liabilities were values in CHF at:

Cash 800,000

Inventory 1,300,000

PPE 4,000,000

Notes Payable (2,100,000)

Glass Corp. prepares consolidated financial statements on December 31, 2019. By the date, the Swiss franc has appreciated to $1.35 = CFH 1. because of the year-end holidays, no transactions took place prior to consolidation.

1. Determine the transition adjustment to be reported on Glasss December 31, 2019, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiarys functional currency.
2. What is the economic relevance of this translation adjustment?