Under US GAAP, What Method of Translating Foreign Currency Financial Statements

question 24

Multiple Choice

Under U.S. GAAP, what method of translating foreign currency financial statements must be used for subsidiaries in highly inflationary economies?

• A) Current rate method
• B) Current/non-current method
• C) Temporal method
• D) Monetary/non-monetary method

---

Definitions:

Expected Rate of Return

The anticipated return on an investment over a specific period, taking into account both the risk of the investment and historical performance trends.

Operating Income

This refers to the profit a company generates from its normal business operations, excluding any income from investments or non-recurring expenses.

Other Postretirement Benefit Expense

Expenses associated with retirement benefits other than pensions, such as healthcare benefits, recognized during the period employees receive the benefits.

Service Cost

In accounting, refers to the expense recognized for employees' future retirement benefits earned during the current period.