D is corrent. ASC Topic 830 requires remeasurement when the US dollar is the functional currency. Remeasurement means that all assets and liabilities on the balance sheet and revenues and expenses on the income statement are translated at the rates in effect when the transactions originally occurred (e.g., depreciation is translated at the exchange rate in effect at the original transaction date) (i.e., the historical rate). Since the useful life of the fixed assets is 10 years with no salvage value, depreciation will be 150,000 LCU for the equipment acquired in year 1 and 90,000 LCU for the equipment acquired in year 2. These are converted to dollars at their respective historical rates of 1.5 and 1.6 LCU.
A is incorrect. ASC Topic 830 requires remeasurement when the US dollar is the functional currency. Remeasurement means that all assets and liabilities on the balance sheet and revenues and expenses on the income statement are translated at the rates in effect when the transactions originally occurred (e.g., depreciation is translated at the exchange rate in effect at the original transaction date) (i.e., the historical rate). Since the useful life of the fixed assets is 10 years with no salvage value, depreciation will be 150,000 LCU for the equipment acquired in year 1 and 90,000 LCU for the equipment acquired in year 2. These are converted to dollars at their respective historical rates of 1.5 and 1.6 LCU.
A is incorrect. ASC Topic 830 requires remeasurement when the US dollar is the functional currency. Remeasurement means that all assets and liabilities on the balance sheet and revenues and expenses on the income statement are translated at the rates in effect when the transactions originally occurred (e.g., depreciation is translated at the exchange rate in effect at the original transaction date) (i.e., the historical rate). Since the useful life of the fixed assets is 10 years with no salvage value, depreciation will be 150,000 LCU for the equipment acquired in year 1 and 90,000 LCU for the equipment acquired in year 2. These are converted to dollars at their respective historical rates of 1.5 and 1.6 LCU.
C is incorrect. ASC Topic 830 requires remeasurement when the US dollar is the functional currency. Remeasurement means that all assets and liabilities on the balance sheet and revenues and expenses on the income statement are translated at the rates in effect when the transactions originally occurred (e.g., depreciation is translated at the exchange rate in effect at the original transaction date) (i.e., the historical rate). Since the useful life of the fixed assets is 10 years with no salvage value, depreciation will be 150,000 LCU for the equipment acquired in year 1 and 90,000 LCU for the equipment acquired in year 2. These are converted to dollars at their respective historical rates of 1.5 and 1.6 LCU.
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