High Inflationary Environment

A U.S. company's subsidiary is operating in a highly inflationary environment. Treatments in U.S. GAAP and IFRS (for comparison) are as follows:

High Inflationary Environment

Foreign subsidiary's :	U.S. GAAP	IFRS
Nonmonetary assets	NOT restated for inflation	Adjusted for inflation
Nonmonetary liabilities	NOT restated for inflation	Adjusted for inflation
Financial statements		Adjusted for inflation
Net purchasing power gain or loss		Recognized in I/S. The subsidiary is translated in USD using the current rate method.
Foreign currency translation	Temporal method	Current rate method
Foreign currency adjustment gain or loss is recognized in:	I/S	B/S