Playco, an accrual basis domestic corporation, manufactures musical instruments for sale both in the United States and

Question:

Playco, an accrual basis domestic corporation, manufactures musical instruments for sale both in the United States and abroad. Beatco's functional currency is the U.S. dollar. Two years ago, Beatco established a branch sales office in Switzerland. The sales office is a qualified business unit with the Swiss franc (CHF) as its functional currency. In Year 1, the branch had CHF40 million of taxable income, and paid CHF15 million of Swiss income taxes. The Swiss franc had an average in Year 1 of CHF1 equals $1.10.
What are the U.S. tax consequences of the branch's activities in Year 1?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...