Chartered Financial Analyst Level 2
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An analyst gathers the following information (in EUR) about a subsidiary's balance sheet at fiscal year-end:
Cash: 400,000
Accounts receivable: 280,000
Accounts payable: 200,000
Long term debt: 1,400,000
During the fiscal year, EUR strengthens against USD. Using the temporal method when translating the subsidiary's financial statements into USD, the company recognizes:
A
a translation loss on the income statement.
B
a translation gain on the income statement.
C
a positive translation adjustment to shareholders' equity.