Under U.S. GAAP, the method used to convert financial statements of foreign subsidiaries into the reporting currency depends upon:

Question

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The functional currency of the subsidiary is the primary factor that determines the method used to convert financial statements of foreign subsidiaries into the reporting currency under U.S. GAAP. The other factors listed (size, temporal location, and current method) do not generally impact the conversion method.

Under US GAAP, the Method Used to Convert Financial Statements of of Foreign