Question

FASB No. 52 is a statement issued by the Financial Accounting Standards Board requiring American MNCs to first convert the financial statement accounts of foreign subsidiaries into the country's functional currency and then translate the accounts into the parent firm's currency using the ________ method.

Answer 1

all-current-rate method

Step-by-step explanation:

The all-current-rate method is the method by which most items in the financial statements are translated at the current exchange rate

In current-rate-method,

the income statement is translated at the weighted average exchange rate,

assets and liabilities are translated at the current rate, issued capital stock is translated at the exchange rate.

The balance sheet must be balanced. Cumulative Translation Adjustment (CTA) balances the asset side of the balance sheet with the liabilities and owner’s equity side of the balance sheet.