Problem
Chapter 11 details the process of how US companies will translate foreign subsidiaries on their consolidated financial statements. US GAAP had developed procedures that ensures the statements reflect the financial results and relationship of entities consistent with the functional currency.
My question to is, Do you think that is what happens? Do you think currency rates fluctuation is too variable and there could be an understatement or overstatement? Should US companies even consolidate foreign subsidiaries, if they are only used to conduct business overseas? Explain your answer.