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 under FASB Statement No. 52?
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

Under FASB Statement No. 52, the temporal method is used in hyperinflationary economies, which is defined as cumulative inflation of approximately 100% or more over a three-year period.

If a Parent Company Has a Subsidiary in a Country