Case $11-2$ Nova Mine Engineering is a junior Canadian company with a variety of operating subsidiaries and other undertakings that provide mine engineering and management services in Canada and in several less$-$developed countries. One of these subsidiaries is active in Zimbabwe, which is rich in mineral resources and has an active mining industry. This company, Zimbabwe Platinum Management $($ZPM$),$ is under review prior to year$-$end translation and consolidation. The staff of ZPM consists primarily of junior and intermediate Nova staff who have been seconded to the operation on one$-$to$-$three$-$year terms. Between the companies there is information flow but no product movement. Capital investment in Zimbabwe is restricted to movable equipment and working capital with a value of about C$$3,000,000.$ Management of Nova has long been concerned about its inability to hedge against fluctuations in the Zimbabwean dollar. All payments to ZPM from the state Mineral Marketing Corporation have recently been made in this currency, rather than in U$.$S$.$ dollars, as specified in earlier contracts. It is this inability to hedge that has increased Nova$$s concern about the long$-$run fit of ZPM within the portfolio of Nova companies, as well as the current financial statement presentation. The currency has declined in value by $6\mathrm{.}3\%$ during the year. Other concerns include Zimbabwe$$s persistent high inflation, recently about $13\%,$ which is expected to increase even further. Political uncertainty is also a concern, as a result of recent nationalizations in the agricultural sector and growing unrest among the poor. Required: In a briefing note, advise senior management of Nova how the investment in the subsidiary ZPM should be measured and reported, and what disclosures should be made with respect to this investment in the annual report of the parent company. Please use the Functional Currency Table to do your analysis.