Which method of translating a foreign subsidiary's financial statements is correct if it is assumed that the parent's net investment is exposed to foreign exchange risk?
A) Historical rate method.
B) Working capital method.
C) Current rate method.
D) Remeasurement.
E) Temporal method.

Question

Quizplus · Accepted Answer

The current rate method is used when the parent's net investment in the foreign subsidiary is exposed to foreign exchange risk, translating all assets and liabilities at the current exchange rate.

Which Method of Translating a Foreign Subsidiary's Financial Statements Is