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Basic Question 1 of 2
Foreign subsidiaries of U.S. parent companies that operate in highly inflationary economies are required by SFAS 52 to use which method for translating the financial statements:
B. Current Rate Method, with the Cumulative Translation Adjustment to be reported as part of Comprehensive Income.
C. Temporal Method, with the Translation Gain or Loss to be reported as part of Net Income.
D. Current Rate Method, with the Cumulative Translation Adjustment to be reported as part of Net Income.
E. Equity Method, with the Translation Gain or Loss to be reported as part of Noncontrolling Interest in Subsidiary.
A. Temporal Method, with the Translation Gain or Loss to be reported as part of Comprehensive Income.
B. Current Rate Method, with the Cumulative Translation Adjustment to be reported as part of Comprehensive Income.
C. Temporal Method, with the Translation Gain or Loss to be reported as part of Net Income.
D. Current Rate Method, with the Cumulative Translation Adjustment to be reported as part of Net Income.
E. Equity Method, with the Translation Gain or Loss to be reported as part of Noncontrolling Interest in Subsidiary.
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
analyze how alternative translation methods for subsidiaries operating in hyperinflationary economies affect financial statements and ratios.
CFA® 2024 Level II Curriculum, Volume 2, Module 13.