我认为这道题选择C

问题如下：

Question Copacabana SA is the Brazilian subsidiary of a US corporation and its results are translated into USD using the current rate method. In recent years, the Brazilian real has generally depreciated against the US dollar. Does the translation process affect Copacabana's reported gross profit margin?

选项：

A.A.No B.B.Yes, after translation the gross profit margin is lower than it was before translation C.C.Yes, after translation the gross profit margin is higher than it was before translation

解释：

Solution

1. Correct because under the current rate method both revenue and cost of revenue are reported using the average exchange rate for the period. As a result, gross margins are not affected by the translation process. Revenues and expenses are translated at the exchange rate that existed when the transactions took place. For practical reasons, a rate that approximates the exchange rates at the dates of the transactions, such as an average exchange rate, may be used. The current ratio, the leverage ratios (debt-to-assets and debt-to-equity ratios), the interest coverage ratio, and the profit margins (gross profit margin, operating profit margin, and net profit margin) are the same in the local currency and parent currency. This result occurs because each of the ratios is calculated using information from either the balance sheet or the income statement, but not both.

2. Incorrect because when the current rate method is used, the translation process does not affect ratios calculated using information from either the balance sheet or the income statement, but not both.

3. Incorrect because when the current rate method is used, the translation process does not affect ratios calculated using information from either the balance sheet or the income statement, but not both.

Multinational Operations

• analyze how the current rate method and the temporal method affect financial statements and ratios