Which of the following statements regarding foreign currency disclosures in the footnotes to financial statements is most accurate?
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A) |
A multinational firm with small liability balances generally has minimal foreign currency exposure on its balance sheet. | |
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B) |
All U.S.-based multinational firms must disclose the accounting method used for foreign currency translation in order to be in compliance with GAAP standards. | |
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C) |
If the parent currency is the functional currency, the temporal method is applied and exposure is equal to net monetary assets. | |
The choice of functional currency is the determining factor as to which method of foreign currency translation is utilized. Therefore, when the parent currency is the functional currency, the temporal method must be used. The choice of functional currency is largely left to management’s discretion. | 
发表于 2011-3-9 16:01
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