The unit of measure assumption means that:

Question

Quizplus · Accepted Answer

The unit of measure assumption states that financial information must be recorded and reported in a stable currency, which is typically the currency of the country where the company is headquartered. Therefore, a multinational company based in the U.S. will translate any transactions in foreign currency to U.S. dollars. Option A is incorrect because not all multinational companies use the U.S. dollar in transacting business. Option B is incorrect because not all multinational companies prepare financial reports in U.S. dollars. Option D is incorrect because IFRS does not require all multinational companies to translate transactions in various currencies to U.S. dollars, but rather allows for the use of different functional currencies.

The Unit of Measure Assumption Means That