A Foreign Subsidiary's Functional Currency Is Its Local Currency and Inflation

question 16

Multiple Choice

A foreign subsidiary's functional currency is its local currency and inflation of over 100 percent has been experienced over a three-year period. For consolidation purposes, SFAS No. 52 requires the use of:

• A) the current rate method only.
• B) the temporal method only
• C) both the current rate and temporal methods.
• D) neither the current rate or the temporal method.