and purposeMultinationalCorporations MNCs based in the United States typically have a numberof subsidiaries in various foreign countries. It is not uncommon forthe consolidated entity to have more sales outside the United Statesthan domestically, and the various subsidiaries often operate withlittle interference from the parent company management. A substantialportion of many foreign subsidiariesâ?? financing, investing, andmarketing activities is done in the foreign environment.Butaccording to generally accepted accounting principles GAAP in theUnited States, MNCs which own more than % of the voting stock offoreign corporations are required to prepare consolidated financialstatements. There are two exceptions to this requirement: whencontrol is temporary, and when control does not exist, despite themajority ownership. This process of consolidation is by no meanstrivial. When consolidation is required, three major steps have to betaken: the foreign financial statements must be recast into USGAAP, the foreign currency denominated financial statements must beremeasured and/or translated into US dollars, and the foreignfinancial statements must be combined with those of the US parent.Thepurpose of this article is to demonstrate that the foreign currencytranslation and consolidation problem does not have a solution and thatthe interests of financial statement users are better served by analternative presentation of foreign currency denominated accounts.