When translating the financial statements of the subsidiary at the date of acquisition by the parent, the exchange rate on the date of acquisition is used to translate plant assets rather than the exchange rate on the date when the subsidiary acquired the plant assets. Explain the rationale for this practice.
Answer to relevant QuestionsIf the sales of a foreign subsidiary all occurred on one day during the year, would the sales be translated at the average rate for the year or the rate on the date of the sales? Explain. What translation method should be used for a self-sustaining subsidiary that operates in a highly inflationary environment? Why? Mega Communications Inc. (MCI) is a Canadian-owned public company operating throughout North America. Its core business is communications media, including newspapers, radio, television and cable. The company's year-end is ...On January 1, Year 3, Jets Ltd., a Winnipeg-based private company, purchased 80% of the shares of Buenos Inc. for 1,900,000 Argentine pesos (AP)-an amount which, at that date, translated to $655,172. The Year 3 financial ...Briefly outline how NFPOs differ from profit-oriented organizations.
Post your question