Process consolidating foreign currency subsidiaries
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Companies that consolidate the results of foreign operations denominated in local currencies must translate the foreign financial statements into U. ASC 830 also applies to the translation of financial statements for purposes of consolidation or combination, or the equity method of accounting.
ASC 830 (aka FAS 52) provides the accounting and reporting requirements for foreign currency transactions and the translation of financial statements from a foreign currency to the reporting currency.
Companies reporting under International Financial Reporting Standards (IFRS) are subject to International Accounting Standard No.
21, The Effects of Changes in Foreign Exchange Rates (IAS 21), which is substantially similar to ASC 830.
The shares owned by outsiders are shown on the balance sheet as an item.These documents are called consolidated financial statements and allow the health of the group to be assessed as a whole, rather than piece-by-piece.Question about how NAV handles currency conversions on consolidations.Minority stockholders are not affected by the parent company’s operations, but they do benefit from the subsidiary’s strengths and weaknesses.Therefore, because the subsidiary's stakeholders are more interested in the subsidiary’s individual financial statements than in the consolidated statements, company annual reports often include both the consolidated statements and the subsidiary statements, but never the parent's financial statements alone.