When the functional currency of a foreign subsidiary is identified as the Canadian dollar, and land purchased by the foreign subsidiary, after the controlling interest was acquired by the parent company who is presenting consolidated financial statements in the Canadian dollar, the land should be translated for consolidation using the

Question

Quizplus · Accepted Answer

When translating assets for consolidation, the historical exchange rate at the date of the transaction is used for non-monetary assets such as land. This is because the historical rate reflects the exchange rate at the time the asset was actually acquired, providing a more accurate representation of the cost in the functional currency.

When the Functional Currency of a Foreign Subsidiary Is Identified