When the temporal method is used, any exchange rate change adjustment to a parent's Dividend Receivable from its foreign subsidiary is reported as an adjustment to Other Comprehensive Income (bypassing earnings).

Question

Quizplus · Accepted Answer

Under the temporal method, exchange rate changes affecting monetary assets and liabilities, such as Dividends Receivable, are recognized in the income statement, not in Other Comprehensive Income.

When the Temporal Method Is Used, Any Exchange Rate Change