According to FASB ASC 830,Foreign Currency Matters,which of the following conditions would indicate that a foreign subsidiary's functional currency is the foreign currency?
A)sales price not affected by changes in exchange rate in the short run
B)high volume of intercompany transactions
C)sales in the local market not significant
D)Most of the subsidiary's financing comes from the parent.

Question

Quizplus · Accepted Answer

According to FASB ASC 830, if a foreign subsidiary's sales price is not affected by changes in exchange rate in the short run, it indicates that the functional currency is the foreign currency. This means that the subsidiary's operations are primarily conducted in the foreign currency, and that currency is the most relevant economic environment for the subsidiary's business activities. Therefore, option A is the best choice. Option B is not relevant because high volume of intercompany transactions does not indicate the functional currency. Option C is also not relevant because the significance of local market sales does not determine the functional currency. Option D is actually the opposite of what would suggest the functional currency because if most of the subsidiary's financing comes from the parent, it could indicate that the subsidiary's operations are more closely tied to the parent's functional currency.

According to FASB ASC 830,Foreign Currency Matters,which of the Following