The financial information of a foreign subsidiary should be included in the consolidated statements of the parent.

Question

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The accounting guidelines state that the financial information of a foreign subsidiary should be included in the consolidated financial statements of the parent company. This is done by translating the foreign subsidiary's financial statements into the parent's reporting currency using the current exchange rates. This consolidation process provides a comprehensive view of the parent company's financial performance, including the operations of its subsidiaries, regardless of their location.

The Financial Information of a Foreign Subsidiary Should Be Included