it is said: " Subsidiaries whose operations are well integrated with the parent will use the parent’s currency as the functional currency. When the functional currency is the same as the reporting currency (parent’s currency), as it is in this case, the temporal method of translation is used. Therefore, Statement 1 is incorrect." then what happen if functional currency is different than the reporting currency here? "Self-contained, independent subsidiaries whose operating, investing, and financing activities are primarily located in the local market will use the local currency as the functional currency. When the functional currency is not the same as the reporting currency (parent’s currency), as in this case, the all-current method is used. " then what happen if functional currency is the same as the reporting currency here?
If functional is the same as reporting you use the temporal. If you are a Swiss subsidiary of a US company and you’re functional currency is the US dollar, use temporal.
why sales outlet need to use temporal, dose “sales outlet” imply that functional currency is the same as reporting one? Thanks. Niblita75 Wrote: ------------------------------------------------------- > If functional is the same as reporting you use the > temporal. If you are a Swiss subsidiary of a US > company and you’re functional currency is the US > dollar, use temporal.