Consolidate Currency Lease For Free

A functional currency is the main currency that a company conducts its business. As companies transact in many currencies but report their financial statements in one currency, the foreign currencies have to be translated into the functional currency.

Full consolidation, proportionate consolidation, and equity consolidation are the three consolidation methods. The consolidation process in accounting is used when the parent owns more than 50% of the subsidiary, while the equity method is used when the parent owns 20 to 50% of the subsidiary.

Instead, please follow these steps: Make the individual statements of cash flows, separately for a parent and separately for a subsidiary. Translate subsidiary's statement of cash flows to the presentation currency.Aggregate subsidiary's and parent's cash flows. Eliminate intragroup transactions.Done.

Account for the lease modification as a termination of the original lease and creation of a new lease from the effective date of the modification. Measure the carrying amount of the underlying asset as the net investment in the original lease immediately before the effective date of the modification.

The three steps in the foreign currency translation process are as follows: Determine the functional currency of the foreign entity.Remeasure the financial statements of the foreign entity into the functional currency.Record gains and losses on the translation of currencies.Current rate Method.Temporal Rate Method.

To put in most simple word possible, FCTR or foreign currency translation reserve is the difference between the translated values of any asset/liability at EOM rate and historical rate.

Each consolidated exchange rate translates between the base currency of a subsidiary and the base currency of its parent or grandparent subsidiary, for a specified accounting period. Consolidated exchange rates include three different rate types per period and subsidiary pair: Current, Average, and Historical.