ADMN 4303H Chapter Notes - Chapter 11: Cash Flow Statement, Canadian Dollar, Financial Statement

• School: Trent University
• Department: Business Administration
• Course: ADMN 4303H
• Professor: Ebadul Islam

Document Summary

With the global economy, it is now very common for a subsidiary to be in a foreign country: most canadian public companies have subsidiaries in foreign countries. Foreign-currency-denominated financial statements must be translated to the presentation currency of the reporting entity. Foreign currency exposure is the risk that a loss (or gain) could occur as a result of changes in foreign exchange rates. Foreign currency risk can be viewed from three different perspectives: translation exposure (accounting exposure, transaction exposure, economic exposure, translation exposure this exposure results from the translation of foreign-currency-denominated financial statements into. For consolidation purposes, we never use an exchange rate older than the rate at the date of acquisition. Lower of cost and net realizable value (lcnrv): under the fct method, the lcnrv principle must be applied using historical cost in canadian dollars and net realizable value in canadian dollars.