Foreign firms operating in highly inflationary economies received special treatment under generally accepted accounting principles (GAAP) relative to translating their financial statements.
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Required:
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a.How does the FASB define a highly inflationary economy?
?
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b.Why is the method typically used for translating foreign entities not permitted for these firms?
?
?
c.What method is used for re-measuring or translating the statements of these firms?
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Question

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The Answer of Foreign firms operating in highly inflationary economies received special treatment under generally accepted accounting principles (GAAP) relative to translating their financial statements.
?
Required:
?
a.How does the FASB define a highly inflationary economy?
?
?
b.Why is the method typically used for translating foreign entities not permitted for these firms?
?
?
c.What method is used for re-measuring or translating the statements of these firms?
?

Foreign Firms Operating in Highly Inflationary Economies Received Special Treatment