The Value Contribution of a Subsidiary of a Multinational Firm

question 47

Essay

The value contribution of a subsidiary of a multinational firm to the firm can be reported in the income statement or balance sheet of the consolidated firm. Explain the reporting of the changes in the value of a subsidiary as a result of the change in an exchange rate - changes to the income and the assets of the subsidiary - in the consolidated financial statements of the parent company.

---

Definitions:

Financial Security

The condition of having stable income or other resources to support a standard of living now and in the foreseeable future.

Physiological Changes

Refers to the alterations in the normal functions of the human body due to various factors like age, disease, or environmental conditions.

Sense of Smell

The ability to perceive odors or scents through the olfactory system located in the nose.

Cranial Nerves

Twelve pairs of nerves that arise directly from the brain, not the spinal cord, and perform a variety of functions including sensory and motor activities.