Before a foreign subsidiary's financial statements can be consolidated with those of its U.S. parent's:

Question

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Before a foreign subsidiary's financial statements can be consolidated with those of its U.S. parent's, the subsidiary's financial statements must be translated into dollars. This is because the parent company reports its financial statements in dollars and needs to have an accurate representation of the subsidiary's financial performance in its reporting currency. The translation process involves converting the subsidiary's financial statements from the foreign currency to dollars using an appropriate exchange rate.

Before a Foreign Subsidiary's Financial Statements Can Be Consolidated with Those