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When a subsidiary that had designated the local currency as the functional currency and later...

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Accounting

  1. When a subsidiary that had designated the local currency as the functional currency and later must change that designation due to hyperinflation, which of the following is true?

  1. Under U.S. GAAP and IFRS, prior period financial statements must be restated.

  1. Under IFRS prior period financial statements must be restated.

  1. Under U.S. GAAP, prior period financial statements must be restated.

  1. Under U.S. GAAP and IFRS, the temporal method is adopted prospectively.

  1. Under IFRS the temporal method is adopted prospectively.

  1. If a subsidiary operates in a hyperinflationary economy, what is considered the functional currency?

  1. The currency where the subsidiary operates.

  1. The U.S. dollar.

  1. Either the currency where the subsidiary operates or the U.S. dollar.

  1. An average of the currency where the subsidiary operates and the U.S. dollar.

  1. Under U.S. GAAP, which of the following is not a required disclosure of data for each reportable segment of a company?

  1. Revenue from customers outside the company.

  1. Interest revenue and expense.

  1. Cost of goods sold.

  1. Profit or loss.

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