Question

Packet Corp. is in the process of preparing its financial statements for the year ended December 31, 20X1. How would a gain on remeasuring a foreign subsidiary's financial statements from the local currency into the functional currency that occurred during 20X1 be classified in these financial statements?

Answer 1

Answer:

It should be classified as income from continuing operations which should be disclosed separately.

Explanation:

According to FASB ASC 830-30-45-17 and 830-30-45-18:

All gains or losses from remeasurements of monetary assets and liabilities need to be recognized income or losses in the current financial statements. The changes have to be disclosed separately in order to provide an analysis of the changes and how they affect the financial statements.