Assume that a U.S.-based MNE has operations in Germany and that the revenues and expenses are mostly incurred in euros.Which translation method is the MNE most likely to use?

Question

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The current-rate method is most likely to be used in this scenario because it is used to translate financial statements of foreign subsidiaries when the functional currency of the subsidiary is the same as the local currency, and the majority of the revenues and expenses are incurred in the local currency. In this case, since the MNE has operations in Germany and most of its revenues and expenses are incurred in euros, the current-rate method is the most appropriate translation method. The temporal method is used when the functional currency is different from the local currency, and the translate-restate method is used for hyperinflationary economies. The consolidation method involves combining the financial statements of subsidiaries into the parent company's financial statements.

Assume That a U