Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using historical rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, dividends must be translated using average rates.

Question

Quizplus · Accepted Answer

Dividends are translated at the exchange rate on the date of the dividend declaration, which is considered a historical rate. This applies regardless of whether the functional currency of the foreign operation is different from the parent's functional currency or not.

Which of the Following Statements Is Correct