Under FAS 52, the effect of an exchange rate change is always reported currently in earnings if the foreign currency is the functional currency.

Question

Quizplus · Accepted Answer

Under FAS 52 (ASC 830, Foreign Currency Matters), the effect of an exchange rate change on a foreign entity's financial statements depends on whether the entity's functional currency is the local currency or the reporting (U.S. dollar) currency. If the foreign entity's functional currency is the local currency, gains and losses from exchange rate changes are generally recorded in other comprehensive income (OCI), not in current earnings.

Under FAS 52, the Effect of an Exchange Rate Change