Which scenario results in foreign currency translation during the consolidation process?

In the context of financial consolidation, foreign currency translation occurs when the currency of a reporting entity (the base entity) differs from the currency of the parent entity. This process ensures that all financial data is presented in a consistent currency, which is essential for accurate consolidation and reporting.

When the base entity's currency and the parent entity's default currency are different, foreign currency translation is necessary to convert the financial results from the base entity's currency to the parent entity's currency. This translation is critical as it reflects the economic reality of different currency exposures, exchange rate variations, and their impact on financial statements.

In scenarios where the base entity and the parent entity share the same currency or where both entities belong to a hierarchy without differing currencies, the need for foreign currency translation does not arise. Therefore, options that involve matching currencies do not trigger the translation mechanism. The key factor in scenario B is the differentiation in currencies, making it the correct scenario that necessitates foreign currency translation during the consolidation process.