QUESTION 3

Companies with significant operations abroad cannot prepare consolidated financial statements unless their accounts and those of their subsidiaries are expressed in a single currency.

Required:

a) Discuss the three (3) traditional methods of translation of financial statements.

(10 marks)

b) Explain the translation of the income statement under the closing rate method.

(5 marks)

c) Explain the translation difference under the closing rate method.

(5 marks)

(Total: 20 marks)

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