Impact of Currency Translation on Consolidated Financial Statements

Very Easy Multinational Operations Impact On Financial Statements

XYZ Corporation operates in multiple countries and uses the local currencies of these countries for its financial transactions. As part of its reporting process, XYZ Corporation consolidates the results of its foreign subsidiaries into its main financial statements. Given the fluctuating exchange rates, how does this consolidation impact the financial statements, specifically in terms of foreign operations?

Foreign currency fluctuations have no impact on the consolidated income statement.

The consolidated financial statements will reflect gains or losses from currency translation.

Foreign currency balances are always reported at the historical exchange rate.

Hint

Submitted4.2K

Correct2.8K

% Correct67%