Which of the following procedures would be necessary when a Swiss subsidiary maintains its books in euros and its functional currency is Japanese Yen and its parent is a U.S.company?
A)Re-measureRe-measurement from euros to U.S.Dollars
B)Re-measureRe-measurement from euros to Japanese Yen; translate from Yen to U.S.Dollars
C)Re-measureRe-measurement from Yen to euros; translate from euros to U.S.Dollars
D)none of the above

Question

Which of the following procedures would be necessary when a Swiss subsidiary maintains its books in euros and its functional currency is Japanese Yen and its parent is a U.S.company?
A)​Re-measureRe-measurement from euros to U.S.Dollars
B)​Re-measureRe-measurement from euros to Japanese Yen; translate from Yen to U.S.Dollars
C)​Re-measureRe-measurement from Yen to euros; translate from euros to U.S.Dollars
D)​none of the above

Quizplus · Accepted Answer

Since the subsidiary maintains its books in euros but its functional currency is Japanese Yen, any transactions need to be re-measured from euros to yen. Then, to assess the impact on the parent company, the figures need to be translated from yen to U.S. dollars. Therefore, option B is the correct choice.

Which of the Following Procedures Would Be Necessary When a Swiss