Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in the local currency, and the U.S. dollar is the functional currency, then

The basic advantage of the …….. method of foreign currency translation is that foreign nonmonetary assets are carried at their original cost in the parent's consolidated statement while the most important advantage of the ……… method is that the gain or loss from translation does not pass through the income statement.

Translation exposure measures

A foreign subsidiary's ………currency is the currency used in the firm's day-to-day operations.

A/an …….subsidiary is one in which the firm operates as an extension of the parent company with cash flows highly interrelated with the parent.

Under the current rate method, specific assets and liabilities are translated at exchange rates consistent with the timing of the item's creation.

Generally speaking, translation methods by country define the translation process as a function of what two factors?

……. exposure is the potential for an increase or decrease in the parent company's net worth and reported net income caused by a change in exchange rates since the last transaction.