Companies must choose between which exchange rates for consolidating foreign subsidiaries?
A) Spot rate and forward rate
B) Spot rate and closing rate
C) Current rate and historical rate
D) Domestic rate and international rate

Question

Quizplus · Accepted Answer

Companies must choose between the current rate and the historical rate when consolidating the financial statements of foreign subsidiaries. The current rate is used for converting assets and liabilities, while the historical rate is used for equity items and any transactions that have been historically recorded at a specific rate.

Companies Must Choose Between Which Exchange Rates for Consolidating Foreign