If a parent company has a subsidiary in a country where the cumulative rate of inflation for the past three years is around 100 percent, which translation methodology would they use according to the IASC?
A) the temporal method.
B) the temporal method after adjusting for inflation.
C) the current rate method.
D) the current rate method after adjusting for inflation.

Question

Quizplus · Accepted Answer

The IASC (International Accounting Standards Committee) suggests using the current rate method after adjusting for inflation in hyperinflationary economies, where cumulative inflation is around 100% over three years.

If a Parent Company Has a Subsidiary in a Country