Which of the following operations benefits from appreciation of the firm's local currency?
Product manufacturing: The appreciation of the firm's local currency reduces foreign competition in the domestic market.
Sales and distribution: The appreciation of the firm's local monetary asset creates a reduction in cash flows from foreign competition that imports products to sell to consumers in the domestic market.
Financial assets and liabilities that are not denominated in the firm's local currency are remeasured into the firm's functional currency using current exchange rates and recorded to the cumulative translation adjustment account. The difference between the consolidated historical carrying values and the new translated values is recorded to the CTA account as transaction gains or losses.