Under the current-rate method, at what exchange rate is depreciation expense translated?
A)At the average rate for the year
B)At the historical rate when the related assets were acquired
C)At the closing rate
D)At the rate at the beginning of the fiscal period

Question

Quizplus · Accepted Answer

Depreciation expense under the current-rate method is translated at the average rate for the year because it reflects the exchange rate over the period in which the expense was incurred, providing a more accurate representation of the expense in the functional currency.

Under the Current-Rate Method, at What Exchange Rate Is Depreciation