How is the international standard for translating foreign currency financial statements (IAS 21) different from U.S. GAAP with respect to subsidiaries in hyperinflationary economies?
A) IAS 21 requires that the subsidiary's financial statements be restated to account for the inflation before using the current exchange rate for all balance sheet accounts.
B) IAS 21 requires that the temporal method be used for translating the foreign currency financial statement.
C) IAS 21 requires the current rate method without taking into consideration any inflation adjustment.
D) U.S. GAAP requires that foreign subsidiary financial statements be restated to account for inflation before applying the current rate method.

Question

Quizplus · Accepted Answer

IAS 21 requires that the subsidiary's financial statements be restated to account for the inflation before using the current exchange rate for all balance sheet accounts.

How Is the International Standard for Translating Foreign Currency Financial