Accounting Discussion Questions

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1- Wahl Company’s consolidated financial statements include two wholly owned subsidiaries. One subsidiary is located in Australia and the other is located in France. The functional currency for the Australian subsidiary is the U.S. dollar. The European euro is the functional currency for the subsidiary located in France.

Given this scenario, address the following with research to support your opinions:

  • What are the objectives of translating a foreign subsidiary’s currency? Why?
  • How do gains and losses arise from the translation or measurement of each subsidiary’s financial statements? How are these measured?
  • The indicators listed in FASB ASC 830 which identifies economic factors to be considered, individually and collectively, in determining the functional currency for a particular subsidiary. Why are these important to consider?

Support your position with scholarly and peer-reviewed sources per the APA style of citation.