Foreign Currency Financial Statements part 4.ppt

TRANSLATINGTHEFINANCIALSTATEMENTSOFFOREIGNOPERATIONSForeignCurrencyFinancialStatements1ForeignentityfinancialstatementsREVIEWWHATWASDISCUSSEDLASTCLASS28:(umulatedOCI).Recognisedifferentials4Amortizationofdifferentials–patent(textp293-294)OnDec3108,PatacquiredStarandpaid$150,$$$: US$150,******@=₤100,000Dec3109: Amortisation=₤100,000/10=₤10,000 ₤10,******@=US$14,500BUT: Writtendownvalueofpatent=₤90,000 ₤90,******@=US$126,000THEREFORE: PatneedstorecognisetotalUS$24,000 amortisation5Worksheet–preacquisitionbalancesEntry(a):EliminateequitybalancesexistingatthetimePatacquiredStar,andrecognisepatent:,,,,000Eliminateinvestmentinsubsidiary6Worksheet–recognisetranslationdifferencesEntry(b):,,,,500Translationadjustmentonincreaseindifferential7Worksheet–panytransactionsandexpensesEntry(c):EliminateAdvancefromStar(debit)toPat(credit),,panybalances8Worksheet–subsidiarydividendsEntry(d):,,600EliminatedividendspaidbyStartoPat9ExerciseOnJanuary1,2011,Peerless,,pany,afirmlocatedinBerlin,Germany,for$66,$(€),,2011,thesubsidiarydeclaredandpaiddividendsof€6,