| After studying this chapter, you should be able to: | |
| LO1 | Explain the theoretical underpinnings and the limitations of the current rate and temporal methods. |
| LO2 | Describe guidelines as to when foreign currency financial statements are to be translated using the current rate method and when they are to be translated using the temporal method. |
| LO3 | Translate a foreign subsidiary's financial statements into its parent's reporting currency using the current rate method and calculate the related translation adjustment. |
| LO4 | Remeasure a foreign subsidiary's financial statements using the temporal method and calculate the associated remeasurement gain or loss. |
| LO5 | Understand the rationale for hedging a net investment in a foreign operation and describe the treatment of gains and losses on hedges used for this purpose. |
| LO6 | Prepare a consolidation worksheet for a parent and its foreign subsidiary. |