Which of the following best describes the normal required method of accounting for statements of foreign entities whose functional currency is the foreign entity's local currency, and in which a U.S.firm has an equity interest?
A)The functional method
B)The monetary-nonmonetary method
C)The current-noncurrent method
D)The temporal method

Question

Which of the following best describes the normal required method of accounting for statements of foreign entities whose functional currency is the foreign entity's local currency, and in which a U.S.firm has an equity interest?
A)​The functional method
B)​The monetary-nonmonetary method
C)​The current-noncurrent method
D)​The temporal method

Quizplus · Accepted Answer

The normal required method of accounting for statements of foreign entities whose functional currency is the foreign entity's local currency, and in which a U.S. firm has an equity interest is the functional method. This method requires that financial statements be translated into the reporting currency using exchange rates based on the economic environment in which the entity operates, with gains or losses on translation recognized in other comprehensive income.

Which of the Following Best Describes the Normal Required Method