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In translating the financial statements of a foreign subsidiary, why is the value assigned to retained earnings especially difficult to determine? How is this problem normally resolved?
The answer to this questions is:
The Retained Earnings balance is created by a multitude of transactions: all revenues, expenses, gains, losses, and dividends since the company’s inception. Identifying each component of this account (so that a separate translation can be made) would be virtually impossible. Therefore, in the initial year that Statement 52 was applied, the ending balance calculated under Statement 8 was merely brought forward. Thereafter, the ending balance translated each year for retained earnings becomes the beginning figure to be reported for the following year.
Your answer must be very similar, but do not copy, do not try to paraphrase, you have to cite where come from your sources in APA FORMAT. That is the requriment. Please used your own words.
Please use the material provide for source a least one.
Use the material provide, that is very important.
The material provide is from this book
Hoyle, J., Schaefer, T., & Doupnik, T. (2011) Advanced Accounting (10th ed). McGraw-Hill Irwin Publishing.
Two sources need one from the book one from others.