NO.PZ2018111303000058
问题如下：
Ulta Beauty is a US-BASED corporation that sells cosmetic. Its Canadian subsidiary, Cosmetic firm, operates solely in Canada. It was created on 31 December 2015, and Cosmetic firm use US dollar as its functional currency. Assume fixed assets were bought when the company was created.
The financial statement information for the years ended 2015 and 2016 on the following table:
Would there be a reason that change the functional currency to the Canadian dollar if:
选项：
A.the inflation rate in the United States became hyperinflationary.
B.management wanted to flow more of the gains through net income.
C.Cosmetic firm were making autonomous decisions about operations, investing, and financing.
解释：
C is correct.
考点：CR method。
解析：
A选项：The parent country’s inflation rate is never relevant.
B选项：如果用CR method，translation G/L是记入OCI的，不影响I/S，这道题的LC是升值的，根据exposure=TA-TL>0，可以判断是translation gain。但是这个translation gain是记入OCI的，不会增加NI，所以不会是管理层改变会计方法的一个动机。
Earnings manipulation is not justified, and at any rate changing the functional currency would take the gains off of the income statement.
C选项：The Canadian dollar would be the appropriate reporting currency when substantially all operating, financing, and investing decisions are based on the local currency.
本题中的B选项，题目本来用的 Temporal Method，加元升值，他的 exposure = monetary assets - monetary liabilities < 0，所以是 translation loss，并计入NI。
如果转换为 Current Method，exposure = TA - TL > 0，并计入OCI。
这样的话，转换后的NI可以少记那一部分的 translation loss，NI会变多，应该是可以成为 management 的动机的呀？
