In Cases of Operations Located in Highly Inflationary Economies

question 37

Multiple Choice

In cases of operations located in highly inflationary economies:

• A) The reporting currency of the U.S. parent-the U.S. dollar-should be used as the foreign entity's functional currency.
• B) The foreign currency should be used as the functional currency with a footnote to the financials displaying what the earnings would have been using the U.S. dollar as the functional currency.
• C) The foreign currency should be used as the functional currency with a single line item-foreign translation-reporting the adjustment using the U.S. dollar as the functional currency.
• D) None of the above.

---

Definitions:

Formal Training

The process of acquiring skills, knowledge, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies.

Principal of Equivalence

In psychoanalysis, the idea that energy diverted from one psychic avenue will emerge in another, maintaining a balance within the psyche.

Energy Differences

Variations in the level of vitality and enthusiasm displayed by individuals, often influenced by physical, emotional, or psychological factors.

Occult

Pertains to supernatural, mystical, or magical beliefs, practices, or phenomena that are beyond the range of normal scientific understanding.