What is the purpose of a remeasurement What is the purpose of a translation contrast the two?



Translation is a process of converting the financial numbers of a subsidiary into the functional currency of the parent company. Remeasurement, on the other hand, is the process of converting financial results in another currency into the company’s functional currency.

What is the difference between translation and remeasurement?

What is the difference between foreign currency remeasurement and translation? Remeasurement focuses on converting foreign currencies into the subsidiary’s functional currency. Translation focuses on converting the functional currency for a subsidiary into the reporting currency for the parent company.

What is a remeasurement?

Remeasurement is the process of re-establishing the value of an item or asset to provide a more accurate financial record of its value.

What is the difference between revaluation and translation?





Hopefully, the difference between translation and revaluation is clear. In a nutshell, I can say converting transaction currency balances to the GL BU currency would be revaluation, and converting base currency balances from one currency to another would be translation (at a very high level).

What is the difference between foreign currency transaction and translation?

The key difference is that a foreign currency transaction is when the company transacts with an unaffiliated 3rd party. Foreign currency remeasurement/translation occurs internally between the parent and subsidiaries.

What is difference between conversion and translation?

1. Conversion is the process of exchanging amounts of one foreign for another. 2. Translation is required at the end of an accounting period when a company still holds assets or liabilities in its statement of financial position which were obtained or incurred in a foreign currency.

What is remeasurement of foreign currency?

Foreign currency remeasurement is a procedure that restates the value of payables, receivables, and cash balances posted in a foreign currency to the company currency at period end. The key day for foreign currency remeasurement is the last day of the period or fiscal year.

How does a remeasurement contract work?





Remeasurement contracts: The contract sum is based on approximate quantities and a schedule of rates. The rates and prices are adjusted where fluctuations occur, and the contract sum is recalculated using the new rates and the final agreed qualities. The actual work done is remeasured when the works are completed.

What is defined benefit remeasurement plan?

Remeasurements of the net defined benefit liability (asset) comprise: (a) actuarial gains and losses; (b) the return on plan assets, excluding amounts included in net interest on the net defined. benefit liability (asset); and.

Where is the remeasurement gain or loss reported in the parent company’s financial statements?

Where is the disposition of a remeasurement gain or loss reported in the parent company’s financial statements? Net income/loss in the income statement.

What is the revaluation process?

The revaluation process is used to adjust account balances denominated in a foreign currency. Revaluation adjustments represent the difference in account balances due to changes in conversion rates between the date of the original journal and the revaluation date.

Why revaluation is done?

The purpose of a revaluation is to bring into the books the fair market value of fixed assets. This may be helpful in order to decide whether to invest in another business. If a company wants to sell one of its assets, it is revalued in preparation for sales negotiations.



What is the purpose of a currency revaluation?

A currency revaluation increases the value of a currency in relation to other currencies. This makes the purchase of foreign goods in foreign currencies less expensive to domestic importers.

What are the two methods used to translate financial statements?

There are two main methods of currency translation accounting: the current method, for when the subsidiary and parent use the same functional currency; and the temporal method for when they do not. Translation risk arises for a company when the exchange rates fluctuate before financial statements have been reconciled.

What is the difference between interpretation and translation of the Bible?

Translation v.



To translate something is to take it from its original language and put it into a different language. To interpret something is to seek to analyze or make sense of something that is being read or watched.

What is translation in accounting?


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What is the difference between functional and reporting currency?

Functional currency is the currency of the primary economic environment in which the entity operates. Reporting currency is the currency in which financial statements are presented. Functional currency depends on the currency of the country that the company operates in.



What is translation in accounting?

Simply put, translation accounting is the process used to turn foreign functional currency financial statements into U.S. dollar-denominated financial statements for consolidation and reporting purposes.

What is currency revaluation?

A revaluation is a calculated upward adjustment to a country’s official exchange rate relative to a chosen baseline, such as wage rates, the price of gold, or a foreign currency. In a fixed exchange rate regime, only a country’s government, such as its central bank, can change the official value of the currency.

How do you account for foreign currency translation?

There are two main methods of currency translation accounting: the current method, for when the subsidiary and parent use the same functional currency; and the temporal method for when they do not.

What do you mean by foreign exchange translation?

Foreign currency translation is the accounting method in which an international business translates the results of its foreign subsidiaries into domestic currency terms so that they can be recorded in the books of account.

What is the need for foreign currency translation?

What is Foreign Currency Translation? Foreign currency translation is used to convert the results of a parent company’s foreign subsidiaries to its reporting currency. This is a key part of the financial statement consolidation process.