Sam Ltd. has a different functional currency than the parent. From 2011 to 2020, the country in which the subsidiary is located experienced a very low level of inflation. Beginning in 2021, the country has experienced a very high level of inflation. Which method should be used to translate the financial statements of the subsidiary for the year ended December 31, 2021?
a.
The functional currency translation (FCT) method should be adopted in place of the presentation currency translation (PCT) method, and the change should be accounted for retroactively.
b.
The presentation currency translation (PCT) method should be adopted in place of the functional currency translation (FCT) method, and the change should be accounted for retroactively.
c.
The functional currency translation (FCT) method should be adopted in place of the presentation currency translation (PCT) method, and the change should be accounted for prospectively.
d.
The presentation currency translation (PCT) method should be adopted in place of the functional currency translation (FCT) method, and the change should be accounted for prospectively.