According to U.S. GAAP, when the local currency is the functional currency, which method is usually required for translating a foreign subsidiary's financial statements into the parent's reporting currency?
A) The temporal method.
B) The current rate method.
C) The current/noncurrent method.
D) The monetary/nonmonetary method.
E) The noncurrent rate method.

Question

Quizplus · Accepted Answer

When the local currency is the functional currency, U.S. GAAP requires the use of the current rate method for translating a foreign subsidiary's financial statements into the parent's reporting currency.