For a U.S. multinational corporation, consolidating the financial statements of foreign subsidiaries requires two steps. First, the foreign subsidiary's statements must be restated according to the U.S. GAAP. The next step is to:

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After restatement of foreign subsidiary's statements according to U.S. GAAP, the next step is to convert the account balances into U.S. dollars. This is necessary to consolidate the financial statements in the parent company's currency. The other options, such as determining exchange rate gain or loss or calculating the translation adjustment, are part of the process but come after the conversion of account balances into U.S. dollars. Restating income using international accounting standards is not necessary for consolidating financial statements of foreign subsidiaries in a U.S. multinational corporation.

For a US Multinational Corporation, Consolidating the Financial Statements of Foreign Subsidiaries