In translating a foreign subsidiary's financial statements, which exchange rate does the current rate method require for the subsidiary's assets and liabilities?
A) The exchange rate in effect when each asset or liability was acquired.
B) The average exchange rate for the current year.
C) A calculated exchange rate based on market value.
D) The exchange rate in effect as of the balance sheet date.
E) The exchange rate in effect at the start of the current year.

Question

Quizplus · Accepted Answer

The current rate method requires that assets and liabilities be translated at the exchange rate in effect as of the balance sheet date.

In Translating a Foreign Subsidiary's Financial Statements, Which Exchange Rate