The functional currency of Garland Inc.s Japanese subsidiary is the Japanese yen. Garland borrowed Japanese yen as
Question:
The functional currency of Garland Inc.’s Japanese subsidiary is the Japanese yen. Garland borrowed Japanese yen as a partial hedge of its investment in the subsidiary. How should the transaction gain on the foreign currency borrowing be reported in Garland’s consolidated financial statements in accordance with IFRS?
a. The transaction gain is reported as an adjustment to interest expense in the income statement.
b. The transaction gain is reported as an extraordinary item in the income statement.
c. The transaction gain is offset against the negative translation adjustment related to the Japanese subsidiary in the stockholders’ equity section of the balance sheet.
d. The transaction gain is offset against the negative translation adjustment related to the Japanese subsidiary on the income statement.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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International Accounting
ISBN: 978-1260466539
5th edition
Authors: Timothy Doupnik, Mark Finn, Giorgio Gotti, Hector Perera