If currency exchange rate changes impact potential cash flows available to the parent and the parent's economic well-being:
A)the functional currency of the subsidiary is the foreign currency.
B)translation gains or losses should be included in net income.
C)the financial relationships as measured in the translated statements are the same as those measured in the foreign currency.
D)the parent may adopt a change in the subsidiary's functional currency.

Question

If currency exchange rate changes impact potential cash flows available to the parent and the parent's economic well-being:
A)​the functional currency of the subsidiary is the foreign currency.
B)​translation gains or losses should be included in net income.
C)​the financial relationships as measured in the translated statements are the same as those measured in the foreign currency.
D)​the parent may adopt a change in the subsidiary's functional currency.

Quizplus · Accepted Answer

The Answer is B

If Currency Exchange Rate Changes Impact Potential Cash Flows Available