Which method of translating a foreign subsidiary's financial statements is correct?
A) Historical rate method.
B) Working capital method.
C) Current rate method.
D) Remeasurement.
E) Temporal method.

Question

Quizplus · Accepted Answer

The current rate method is the most commonly used and accepted method of translating foreign subsidiary financial statements. It involves translating all the subsidiary's monetary items at the current exchange rate and non-monetary items at their historical exchange rates. This method reflects the current economic conditions and avoids distortion due to historical rates.

Which Method of Translating a Foreign Subsidiary's Financial Statements Is