Chapter 11  Logo

Student Learning Outcomes:

After completing this chapter you should be able to

  • Define the functional currency, and identify factors suggesting the functional currency
  • Explain the objectives of the translation process
  • Apply the functional currency translation process to a trial balance, and calculate the translation adjustment
  • Explain how the translation adjustment is accounted for
  • Apply the remeasurement process to a trial balance, and explain how to account for the remeasurement gain or loss
  • Differentiate between the two methods for converting functional currency to the parent/investor's currency, and explain the circumstances under which each should be used.


Chapter 11: "Translation of Foreign Financial Statements", pp. 597 - 614, 621 - 635.


The Chapter 11 lecture is broken down into two parts. Part 1 deals with the theoretical aspects related to translation of foreign financial statements. Part 2 deals with the application of the different methods of translation. In addition, one additional narration related to the translation rules is available.

The narrated lecture and PDF handout can be accessed from the following links.

Part 1 - The Theory (11:19 minutes) - PowerPoint Handout
Part 2 - The Application (21:03 minutes) - PowerPoint Handout
Translastion Rules (12:18 minutes) - PowerPoint Handout

Narrated Solutions:

Narrated solutions to selected Chapter 11 exercises are available below.

Exercise 11-1 (8:36 minutes) - PowerPoint Handout
Exercise 11-2 (6:35 minutes) - PowerPoint Handout

Your Assignment:

There is no assignment for Chapter 11.

Supplemental Problems:

Supplementary Problems for Chapter 11 are available here. A worksheet to facilitate the solution to the supplementary problems is available here.

You might find the Chapter 11 Translation Rules helpful in solving the supplementary problems. Solutions to the Chapter 11 Supplementary Problems are available here.