For Publicly Accountable Companies, with Foreign Operations in Countries with a Hyper-Inflationary

Multiple Choice

For publicly accountable companies, with foreign operations in countries with a hyper-inflationary economy, what should be done prior to translation?

A) The subsidiary's financial statements must be adjusted for changes in the price levels of the subsidiary's country.
B) The subsidiary's financial statements must be adjusted for changes in the price level of the parent's country.
C) The subsidiary's financial statements must be adjusted by the average inflation rate of the subsidiary and the parent companies' countries.
D) No adjustment is required unless the changes in price levels of the subsidiary country exceed 1000%.