Whether to use the current or temporal rates depends on the functional currency of the foreign operation.

Question

Quizplus · Accepted Answer

The method (current or temporal) used to translate foreign currency financial statements into the reporting currency depends on the functional currency of the foreign operation. If the foreign operation's functional currency is the local currency, the current rate method is typically used. If the functional currency is the parent company's currency, the temporal method is generally applied.

Whether to Use the Current or Temporal Rates Depends on the Functional