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Question
If a U.S.-based MNE translates its German subsidiary's financial statements from euros into dollars using the current-rate method, how would it recognize translation gains and losses?
A) Gains and losses would be taken to the income statement.
B) Gains and losses would be recognized on the balance sheet in owners' equity.
C) Gains and losses are not recognized since the financial statements are in dollars.
D) There are transaction gains and losses but not translation gains and losses.
Answer
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