The current-rate method of translating financial statements is used when
A) the local currency is the functional currency.
B) the local currency is the foreign currency.
C) the parent's reporting currency is the functional currency.
D) you are translating current financial statements.

Question

Quizplus · Accepted Answer

The current-rate method is used when the local currency is the functional currency, meaning the financial statements of a foreign subsidiary are translated into the parent company's reporting currency using the current exchange rate for all assets and liabilities.

The Current-Rate Method of Translating Financial Statements Is Used When