When the Functional Currency of a Foreign Subsidiary Is Identified

question 4

Multiple Choice

When the functional currency of a foreign subsidiary is identified as the Canadian dollar, and land purchased by the foreign subsidiary, after the controlling interest was acquired by the parent company who is presenting consolidated financial statements in the Canadian dollar, the land should be translated for consolidation using the

• A)historical rate in effect when the land was purchased.
• B)current rate in effect at the balance sheet date.
• C)forward rate.
• D)average exchange rate for the current period.