ABC Corporation is a manufacturing company that recently acquired a subsidiary in a foreign country. The subsidiary's functional currency is different from the parent company's reporting currency. ABC Corporation prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Which of the following statements regarding the translation of the subsidiary's financial statements and the consolidation process is correct? A) When translating the subsidiary's financial statements from its functional currency to the parent company's reporting currency, historical exchange rates are used for all balance sheet items. B) Under IFRS, if the functional currency of the subsidiary is different from the reporting currency of the parent company, the subsidiary's financial statements must be remeasured using the reporting currency before consolidation. C) If the subsidiary's functional currency is the same as the parent company's reporting currency, there is no need for currency translation or remeasurement when preparing consolidated financial statements. D) The translation of the subsidiary's financial statements is a one-time process, and the exchange rates used for translation remain fixed for all future financial reporting periods. E) If the subsidiary's financial statements are not available in the functional currency, the parent company can use its own reporting currency to prepare consol
*ABC Corporation is a manufacturing company that recently acquired a subsidiary in a foreign country. The subsidiary's functional currency is different from the parent company's reporting currency. ABC Corporation prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS).
Which of the following statements regarding the translation of the subsidiary's financial statements and the consolidation process is correct?
A) When translating the subsidiary's financial statements from its functional currency to the parent company's reporting currency, historical exchange rates are used for all
B) Under IFRS, if the functional currency of the subsidiary is different from the reporting currency of the parent company, the subsidiary's financial statements must be remeasured using the reporting currency before consolidation.
C) If the subsidiary's functional currency is the same as the parent company's reporting currency, there is no need for currency translation or remeasurement when preparing consolidated financial statements.
D) The translation of the subsidiary's financial statements is a one-time process, and the exchange rates used for translation remain fixed for all future financial reporting periods.
E) If the subsidiary's financial statements are not available in the functional currency, the parent company can use its own reporting currency to prepare consolidated financial statements without any adjustments.*
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