Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in the local currency, and the local currency is the functional currency, then:
A) the translation method to be used is not obvious.
B) translation is accomplished through the temporal method.
C) translation is not required.
D) translation is accomplished through the current rate method.

Question

Quizplus · Accepted Answer

When the financial statements of a foreign subsidiary are maintained in the local currency, and the local currency is also the functional currency, the current rate method is used for translation under U.S. accounting standards.