Resumen
Circumstances, which include international trade intensification, development of various forms of business cooperation outside national borders - co-production, transfer of technology, joint ventures, strategic alliances, direct foreign investments, and dynamic changes in the business environment, require the management of a company to change its focus, from a local to a global approach. Multinational companies are business leaders in a global framework. The aim of this paper is to highlight the key challenges that multinational companies face when translating foreign currency transactions and the financial statements of foreign business operations for the purpose of compiling consolidated financial statements. In addition, the paper examines whether the chosen functional currency and the exchange rate can be viewed as instruments of their financial reporting policy?