A Venezuelan subsidiary owns land acquired for 10,000,000 bolivares fuertes (Bs.F) when the exchange rate was $0.90/Bs.F. The rate at the end of the current year is $0.10, and the price level index has increased from 100 at the date the land was acquired to 1,000 at the end of the current year. The subsidiary's functional currency is the Bs.F. The parent's reporting (presentation) currency is the U.S. dollar.
Required
a. At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows U.S. GAAP and Venezuela is not considered to be a highly inflationary country? At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows IFRS and Venezuela is not considered to be a highly inflationary country?
b. At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows U.S. GAAP and Venezuela has been declared a highly inflationary country?
c. At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows IFRS and Venezuela has been declared a highly inflationary country?
d. If you answered Parts b. and c. correctly, when hyperinflation exists the land is reported at different amounts depending on if the parent follows U.S. GAAP or IFRS. Under what circumstances will the U.S. GAAP and IFRS amounts be the same?

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The Answer of A Venezuelan subsidiary owns land acquired for 10,000,000 bolivares fuertes (Bs.F) when the exchange rate was $0.90/Bs.F. The rate at the end of the current year is $0.10, and the price level index has increased from 100 at the date the land was acquired to 1,000 at the end of the current year. The subsidiary's functional currency is the Bs.F. The parent's reporting (presentation) currency is the U.S. dollar.
Required
a. At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows U.S. GAAP and Venezuela is not considered to be a highly inflationary country? At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows IFRS and Venezuela is not considered to be a highly inflationary country?
b. At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows U.S. GAAP and Venezuela has been declared a highly inflationary country?
c. At what value will the land be reported in the consolidated balance sheet, if the subsidiary's parent follows IFRS and Venezuela has been declared a highly inflationary country?
d. If you answered Parts b. and c. correctly, when hyperinflation exists the land is reported at different amounts depending on if the parent follows U.S. GAAP or IFRS. Under what circumstances will the U.S. GAAP and IFRS amounts be the same?

A Venezuelan Subsidiary Owns Land Acquired for 10,000,000 Bolivares Fuertes