Which of the following statements is correct?
A) If an organization is self-sustaining, capital stock must be translated using closing rates.
B) If an organization is self-sustaining, capital stock must be translated using average rates.
C) If an organization is self-sustaining, capital stock must be translated using historical rates.
D) If an organization is considered an integrated foreign subsidiary capital stock must be translated using average rates.

Question

Quizplus · Accepted Answer

For a self-sustaining foreign operation, capital stock is translated using historical rates, as it reflects the rate at the time the capital was invested.

Which of the Following Statements Is Correct