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Answer each of the following questions and cite appropriate justification for your answer
Answer each of the following questions and cite appropriate justification for your answer. (GAAP ASC Codification)
4. Company A sold a foreign subsidiary during the current year. In Company A’s equity, there was a cumulative foreign translation adjustment related to the subsidiary. How will this cumulative foreign translation adjustment be accounted for in the sale?
Expert Solution
The accumulative Translation Adjustment (CTA) may be a point inside associate accounting statement that handles any gains or losses that have occurred thanks to exposure to foreign currency markets through traditional business activities. the road item is clearly noted, separating the data from that of different gains or losses.
This is sorted together with reserves as a separate point.
So on Sale of subsidiary CTA conjointly can for a {part of} Reserves and thence thought-about in Networth of the subsidary into account and can for part in hard of profit/Loss on sale of subsidiary.
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