The current rate method is typically employed when translating records of ________.
A) foreign subsidiaries that are part of the parent firm's operations
B) domestic affiliates that conduct business abroad occasionally
C) foreign subsidiaries that are considered stand-alone legal entities
D) joint venture partnerships that participate in global operations

Question

Quizplus · Accepted Answer

The current rate method is typically used for translating the financial statements of foreign subsidiaries that are considered stand-alone legal entities. This method involves translating all assets and liabilities at the current exchange rate in effect at the balance sheet date, reflecting the subsidiary as an independent entity.

The Current Rate Method Is Typically Employed When Translating Records