Answer: historical rate.

## Explanation When a foreign subsidiary has the **parent's presentation currency as its functional currency**, the **temporal method** is used for translation. **Under temporal method:** - **PP&E (Property, Plant & Equipment)** are **non-monetary items** measured at historical cost - Non-monetary items measured at historical cost are translated at **historical exchange rates** - This preserves the original cost basis in the parent's currency **Translation rates under temporal method:** - Monetary items: Current rate - Non-monetary items at historical cost: Historical rate - Non-monetary items at fair value: Current rate - Revenue/expenses: Average rate (except for items related to balance sheet items translated at historical rates) Option C is correct because PP&E measured at historical cost is translated at historical exchange rates under the temporal method.

Author: LeetQuiz Editorial Team