Down-under created a wholly-owned subsidiary

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Cabby’s Cab is a US Corporation and has an Australian subsidiary, Cabby Down Under Co. Their functional currency is the Australian dollar. Down-Under holds a US dollar-denominated accounts receivables and is required to record unrealized transaction gains and losses on its US dollar-denominated receivables in its income statement. Down-Under created a wholly-owned subsidiary, CabbyTaxi, for the sole purpose of holding the US dollar denominated receivable. What is CabbyTaxi’s functional currency?

1. Australian dollar

2. Euro

3. No functional currency can be determined

Reference no: EM131553486

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