A net asset balance sheet exposure exists and the foreign currency appreciates. Which of the following statements is true?
A) There is no translation adjustment.
B) There is a transaction loss.
C) There is a transaction gain.
D) There is a negative translation adjustment.
E) There is a positive translation adjustment.

Question

Quizplus · Accepted Answer

When a foreign currency appreciates and there is a net asset balance sheet exposure, the value of the foreign assets increases in terms of the reporting currency, leading to a positive translation adjustment.

A Net Asset Balance Sheet Exposure Exists and the Foreign