Respuesta :
All obligations are translated using the current exchange rate according to the current rate technique of translation.
The majority of financial statement items are translated using the current exchange rate under the current rate method of foreign currency conversion.
When a company has operations abroad, it could be necessary to convert the foreign currency that is earned by such operations into the presentation currency, which is the currency that is used to prepare the firm's financial statements. When a subsidiary is not well linked with the parent firm and its operational currency is the same as the local currency in which it operates, the current rate approach is used.
The current rate technique is a widely used method of currency conversion that makes use of the current exchange rate on the market.
The conversion of a parent company's financial results into another currency is known as currency translation.
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