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Foreign currency translation adjustment is an example of an item that would be included in other comprehensive income.
Foreign Currency Translation
The process of converting the financial statements of a company from its operating currency into another currency for reporting purposes.
Other Comprehensive Income
Specified items that are reported separately from net income, including foreign currency items, pension liability adjustments, and unrealized gains and losses on investments.
Adjustment
A process of making entries to account records to correct or update the financial information.
- Recognize the importance of comprehensive income and its components in financial reporting.
- Recognize the special accounting treatment for foreign currency translation adjustments and their effect on other comprehensive income.
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Learning Objectives
- Recognize the importance of comprehensive income and its components in financial reporting.
- Recognize the special accounting treatment for foreign currency translation adjustments and their effect on other comprehensive income.
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