In Implementing FASB 52

question 12

Multiple Choice

In implementing FASB 52,

• A)the functional currency of the foreign entity must be translated into the reporting currency in which the consolidated statements are reported.
• B)the local currency of a foreign entity may not always be its functional currency. If it is not, the temporal method of translation is used to remeasure the foreign entity's books into the functional currency.
• C)the current rate method is used to translate from the functional currency to the reporting currency.
• D)in some cases, a foreign entity's functional currency may be the same as the reporting currency, in which case translation is not necessary.
• E)All of the above are true

---

Definitions:

GDP Devoted To Investment

The portion of the Gross Domestic Product that is spent on investments in capital goods, infrastructure, and other activities to promote economic growth.

Poor Countries

Nations with low levels of economic activity, low per capita income, and generally low standards of living.

Catch-Up Effect

The property whereby countries that start off poor tend to grow more rapidly than countries that start off rich

Economic Growth Rates

The percentage increase in the market value of the goods and services produced by an economy over time, typically measured on an annual basis.