The Two Methods for the Translation of Foreign Subsidiary Financial

question 9

Essay

The two methods for the translation of foreign subsidiary financial statements are the current rate and temporal methods. Briefly, describe how each of these methods translates the foreign subsidiary financial statements into the parent company's consolidated statements. Identify when each technique should be used and the major advantage(s) of each.

---

Definitions:

Fossilized

Fossilization refers to the process by which organic material is replaced by minerals, turning remains into stone over geological time.

Plate Tectonics

This is the scientific theory that explains the large-scale motion of Earth's lithosphere, which is divided into tectonic plates.

Earth's Crust

The outermost layer of the Earth, composed of solid rocks and minerals, which is both continental and oceanic in type.

Unique Traits

Characteristics or features that distinguish an individual or species from others.