这道case是不是不应该划分到 Intercorporate investments 章节里面

问题如下：

In 2008, Nation most likely used which of the following translation methods for the Jamaican resort?

选项：

A.The current rate method because the Jamaican dollar was the functional currency B.The temporal method because of the high rate of inflation C.The temporal method because the US dollar was the functional currency

解释：

Solution

C is correct. Based on the facts described, the US dollar was the Jamaican resort’s functional currency in 2008. The US economy and the US dollar are the factors that influence the prices of the vacation packages. The operations were financed from the United States, and excess funds were invested there. Nation also supplied onsite management. Therefore, the temporal method would be the most appropriate method to use. Although inflation was high at 20% per year over the prior three years, it did not meet the US GAAP definition of a highly inflationary economy (a cumulative three-year inflation rate exceeding 100%), which requires the temporal method be used for subsidiaries normally using the current rate method during periods of hyperinflation.

A is incorrect. Even though some of the factors to determine the functional currency are mixed, priority is given to the determination of prices, so the US dollar is the functional currency, not the Jamaican dollar.

B is incorrect. The temporal method would be required under US GAAP if it were hyperinflationary (more than100% over three years).