Under the current rate method of translating foreign currency financial statements, what is the amount of the balance sheet exposure?
A) It is equal to the amount of assets recorded by the subsidiary.
B) It is equal to the amount of liabilities recorded by the subsidiary.
C) It is equal to the foreign operation's net asset position.
D) It is equal to total assets plus total liabilities.

Question

Quizplus · Accepted Answer

The balance sheet exposure under the current rate method is equal to the foreign operation's net asset position, which includes all assets and liabilities recorded by the subsidiary at the current exchange rate. Therefore, option A, B, and D are incorrect.

Under the Current Rate Method of Translating Foreign Currency Financial