For foreign subsidiaries whose functional currency is not the parent's reporting currency the current rate method is used to translate assets and liabilities using the exchange rate on the balance sheet date.

Question

Quizplus · Accepted Answer

This is correct. Under the current rate method, assets and liabilities of foreign subsidiaries are translated using the exchange rate on the balance sheet date, even if the functional currency of the subsidiary is different from the parent's reporting currency.

For Foreign Subsidiaries Whose Functional Currency Is Not the Parent's