Impact of Changing Functional Currency on Financial Statements

ABC Corporation operates in multiple countries and follows IFRS for its financial reporting. The company reports its foreign subsidiaries using the functional currency of each subsidiary. Recently, ABC entered a new market in a country experiencing significant currency volatility. Due to high inflation, the local currency has been depreciating rapidly against the U.S. dollar. In response to the depreciating local currency, the management is considering adopting a different functional currency to better reflect the economic environment.

Which of the following statements accurately describes the impact on ABC Corporation's financial statements if the company decides to change the functional currency of its foreign subsidiary from the local currency to the U.S. dollar?