LaSalle Ltd

Multiple Choice

LaSalle Ltd., a Canadian company, has a subsidiary in Brazil that produces a component used in LaSalle's manufacturing. All of the components that the subsidiary produces are sold to LaSalle. The subsidiary also purchases most of the raw materials used in its production from LaSalle. Both companies use the Canadian dollar as their functional currency. Which of the following statements is true?

A) The current rate method of translation should be used.
B) Nothing needs to be done with the subsidiary's financial statements prior to consolidation.
C) The subsidiary's financial statements need to be re-measured in the functional currency prior to consolidation.
D) The subsidiary is considered to be an extension of the parent company and consolidation is not required.