Explanation:
Under the temporal method:
Since the foreign currency has consistently depreciated:
Compared to current rate method (where all assets and liabilities use current rate):
Therefore, the temporal method most likely results in lower reported assets compared to the current rate method.
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The foreign currency of a subsidiary has consistently depreciated against the parent's presentation currency. The subsidiary does not have any non-monetary liabilities, but does have long-term debt issued five years ago. Compared to the current rate method, the temporal method of translation most likely results in:
A
A lower reported assets.
B
B higher reported equity.
C
C higher reported liabilities.