flyinggirl

i didn't get this at first either.

i believe it's b/c transactions are still taking place in a local currency (wherever the subsidiary is located) no matter what.

so if the parent co is a company in US and presentation currency is USD and they have a subsidiary in Europe then the local currency is EUR.

if the functional currency of the sub is USD, then the functional and presentation match, so the Euros are translated at the temporal rate

if the functional currency is not the presentation currency of the parent (ie sub's functional matches local, EUR), then use current method.