Process consolidating foreign currency subsidiaries
This is particularly advantageous when a company is developing a new product.
In this case, organizing it as a subsidiary and subsequently selling it off would achieve that goal.
However, the consolidated financial statements are of limited use to creditors or minor stockholders of the subsidiary.
For example, a subsidiary’s creditors have a claim against the subsidiary alone, and they cannot expect payment from the parent company.
These documents are called consolidated financial statements and allow the health of the group to be assessed as a whole, rather than piece-by-piece.
Question about how NAV handles currency conversions on consolidations.
Companies that consolidate the results of foreign operations denominated in local currencies must translate the foreign financial statements into U. ASC 830 also applies to the translation of financial statements for purposes of consolidation or combination, or the equity method of accounting.