Question #119
Reading: Reading 10 Multinational Operations
PDF File: Reading 10 Multinational Operations.pdf
Page: 65
Status: Unattempted
Question
Which translation method should be used under a hyperinflationary economy when using U.S. GAAP?
Answer Choices:
A. Monetary/non-monetary, because all monetary accounts are translated at the historical rate
B. All-current, because dividends are translated at the rate that applied when they were issued
C. Temporal, because all non-monetary accounts are re-measured at the historical rate
Explanation
The temporal method is more appropriate because all non-monetary accounts are
remeasured at the historical rate. Under IFRS, the financials would be restated for
inflation, and then translated under the current rate method.