If a U.S.-based company has a subsidiary in Germany, and the German subsidiary imports components from Britain, the British pound would most likely be considered (from the standpoint of the German subsidiary)
A) the local currency.
B) a foreign currency.
C) the functional currency.
D) the reporting currency.

Question

Quizplus · Accepted Answer

The British pound would be considered a foreign currency from the standpoint of the German subsidiary because it is not the local currency (Euro) and it is not the functional currency (which would depend on the subsidiary's primary economic environment). The reporting currency would depend on the parent company's reporting requirements.

If a US-Based Company Has a Subsidiary in Germany, and the German