1)A subsidiary of a US company based in China keeps its books in the Chinese renminbi and does the majority of its business in the Chinese renminbi (RMB). The home currency is the US dollar (USD). According to IAS 21: The Effects of Changes in FX Rates , during the step where one translates foreign currency financial statements into the functional currency, non-monetary items that are reported at historical cost in RMB

a.are translated into USD using the closing exchange rate.

b.are translated into USD using the exchange rate on the transaction date.

c.are translated into USD using the exchange rate as of the date of the fair value measurement.

do not need to be translated in this step as they are already in the functional currency