For 360 Painting, how are monetary items denominated in currencies other than the functional currency handled in the consolidated statements of operations?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
The assets and liabilities of foreign operations in Canada, whose functional currency is other than the U.S. dollar, are translated to U.S. dollars at the period end exchange rates and revenues and expenses are translated at average exchange rates for the period. For all operations, the monetary items denominated in currencies other than the functional currency are remeasured at period-end exchange rates and transaction gains and losses are included in general and administrative expense in the consolidated statements of operations. Impacts resulting from the foreign currency fluctuations were not significant to the consolidated financial statements as of and during the periods presented.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the company addresses the translation of foreign currency in its consolidated financial statements. For operations in Canada, where the functional currency differs from the U.S. dollar, assets and liabilities are converted to U.S. dollars using the period-end exchange rates. Revenues and expenses are translated using average exchange rates for the period.
For all of 360 Painting's operations, monetary items denominated in currencies other than the functional currency are remeasured at period-end exchange rates. Any transaction gains or losses resulting from these remeasurements are included as part of general and administrative expenses within the consolidated statements of operations.
The 2025 FDD indicates that the impacts resulting from foreign currency fluctuations were not significant to the consolidated financial statements as of and during the periods presented. This suggests that currency exchange rates did not have a material impact on 360 Painting's financial results during the reported periods.