商学院财务报表合并讲义英文(编辑修改稿)

商学院财务报表合并讲义英文(编辑修改稿)内容摘要：

urs daily. See the idea? 24 Subsequent to Acquisition  Calculation of translation gain or loss (continued):  Selfsustaining subsidiaries (current rate method): translation exposure arises from the sub’s asset position. If it was in a asset (liability) position during the year, it is exposed to FCU rate decreases (FCU rate increases). This requires a schedule (ex. p. 582 of text) tracking asset position at start and end of year. The intuitive idea is that assets serve as a “hedge” of liabilities, whether moary or not, since repatriation of the investment may be a long way off. See the idea?  Concepts of “exposure” and what “hedges” this exposure drives the calculation of translation gain or loss. As an interesting extension, if the parent wanted to, it could (see p. 574 of text) hedge its investment in a SSFO with a forward exchange contract. Any remeasurement gains or losses on the latter go to OCI to offset translation gains or losses. See the idea? 25 Illustration  Example: At the beginning of the year, parent invests 500 foreign currency units (FCU) in an integrated foreign subsidiary when 1 FCU=1 Canadian dollar (CAD). The assets were held for the entire year, with no sales or expenses incurred. At the end of the year, the exchange rate has changed to1FCU = 26 Illustration – Integrated Subsidiary FC U E xch . R a t e C A D Ga i n (l o ss)C a sh a n d A / R 200 1 . 5 0 300$ 100$ I n v e n t o ry a t co st 300 1 . 0 0 300$ $ Fi xe d a sse t s, a t co st 500 1 . 0 0 500$ $ A cco u n t s p a y a b l e 1 0 0 1 . 5 0 150$ 50$ L o n g te rm d e b t 4 0 0 1 . 5 0 600$ 200$ N e t a sse t s 500T ra n sl a t i o n l o ss 150$  The pany was in a moary liability position at the start and end of the year and FCU rate increases. Loss = 300 x ( – ). Intuitively, it had unhedged moary liability exposure and, since sub is an IFO, this is “transactions” exposure. The parent’s CFO could have but did not hedge this exposure. See the idea? 27 Illustration – SelfSustaining Subsidiary F C U Ex c h. Ra te C AD G ai n ( l os s )C as h and A /R 200 300$ 100$ Inv entor y at c os t 300 450$ 150$ F i x ed as s ets , at c os t 500 750$ 250$ Ac c oun ts pay abl e 100 150 $ 50 $ Lon g ter m debt 400 600 $ 200 $ N et as s ets 500T r ans l ati on l os s 250$  The pany was in a asset position at the start and end of the year and FCU rate increased. Gain = 500 x (). If parent’s CFO was worried about FCU rate decrease in the future, it could hedge this asset exposure with a forward contract or issue FCU denominated debt at the parent’s head office or get the sub to issue FCU denominated debt to get asset position to zero. See the idea? You are now ready to try Case 113! 28 Comparative Observations of the Two Translation Methods  Temporal method – the moary position is at risk from foreign currency fluctuations  Current rate method – the asset position of the foreign equity is at risk from foreign currency fluctuations  For most panies moary liabilities are greater than moary assets so they are usually in a moary liability position  This will result in exchange losses (gains) for integrated subsidiaries when foreign currency appreciates (depreciates) in value  Most panies have positive assets  This will result in exchange gains (losses) for selfsustaining subsidiaries when foreign currency appreciates (depreciates) in value 29 Comprehensive Example – Integrated/SelfSustaining (p. 577, text)  First, we will illustrate selfsustaining。 then, we will illustrate integrated operations. Same case facts will be used for both scenarios.  Note: for the final exam, you are only responsible for a full consolidation one year after the date of acquisition. O n Dec em be r 3 1, Y ea r 1 , S ta r m on t, a Can ad i an c om pa ny , a c qu i r ed 1 00 % of th e c om m on s ha r es of Con tr ol od a S A , a n E s to ni an c om pa ny , a t a c ost of 2, 00 0, 00 0 k r oo ns. T he e x c ha ng e r at e w as K 1 = $ 0. 12 8 on th i s d at e. T he r e i s n o acqui s i ti on d i f f eren ti al i n th i s e x am pl e.Rel ev an t e x c ha ng e r at es are a s f ol l ow s :Dec em be r 3 1, Y ea r 1 K 1 = $ 0. 12 8Dec em be r 3 1, Y ea r 2 K 1 = $ 0. 10 4A v erag e f or Y ea r 2 K 1 = $ 0. 11 5Date o f p urc ha s e f or i nv en to r y o n ha nd a t e nd of Y ea r 2 K 1 = $ 0. 11 0Date d i v i de nd s d ecl ared K 1 = $ 0. 10 4 30 Comprehensive Example – SelfSustaining Operations 31 Comprehensive Example – SelfSustaining Operations 32 Comprehensive Example – SelfSustaining Operations 33 Comprehensive Example – SelfSustaining Operations  Again, the intuition is that the sub was in a asset position at the start and end of the year and FCU rate decreased.  Exchange loss from translation appears in two places in consolidated financial statements: 1) OCI (foreigncurrency translation adjustment) on the ine statement。 and 2) AOCI (accumulated translation adjustment) on the balance sheet. 34 Comprehensive Example – SelfSustaining Operations  Equity method journal entries (p. 582 of text)  Note that the parent’s retained earnings after translation and consolidation is established by these entries. 35 Comprehensive Example – SelfSustaining Operations 36 Comprehensive Example – SelfSustaining Operations 37 Comprehensive Example – Integrated Operations  Cost of goods sold/change in inventory calculated as follows: 38 Comprehensi。