4. A US multinational corporation, consolidating the financial statements of foreign subsidiaries requires 2 steps. 1st the foreign subsidiary statements must be restated according to the U. S GAAP (Generally Accepted Accounting Principle). 2nd:

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Business

Nathaly Richard

29 March, 22:57

4. A US multinational corporation, consolidating the financial statements of foreign subsidiaries requires 2 steps. 1st the foreign subsidiary statements must be restated according to the U. S GAAP (Generally Accepted Accounting Principle). 2nd:

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Amaris Romero · Answer 1

1) The foreign subsidiary statements must be restated according to the U. S GAAP (Generally Accepted Accounting Principle).

2) convert the account balances into U. S. dollars.

Explanation:

A US multinational corporation, consolidating the financial statements of foreign subsidiaries requires 2 steps.

1) The foreign subsidiary statements must be restated according to the U. S GAAP (Generally Accepted Accounting Principle). The foreign subsidiaries submit financial statements as per the accounting standard in their country. Hence their arises a need to restate the same as per the GAAP standards

2) Convert the account balances into U. S. dollars:The financial statements submitted by foreign subsidiaries reflect the currency used by the foreign country. Hence the next important step is to convert it into US Dollars

GAAP is a US based accounting standard adopted by U. S. Securities and Exchange Commission. It sets standard of business and corporate accounting.