Translation process among the monetary/nonmonetary method, Financial Management

Assignment Help:

Explain the distinction in the translation process among the monetary/nonmonetary method and the temporal method.

Answer:  Within the monetary or nonmonetary method, every monetary balance sheet accounts of a foreign subsidiary are transformed at the current exchange rate. Other balance sheet accounts are translated at the historical rate exchange rate effectively while the account was first recorded. Within the temporal method, monetary accounts are translated at the current exchange rate.  Other balance sheet accounts are as well translated at the current rate, if they are accepted on the books at current value.  If they are accepted at historical value, they are translated at the rate in effect on the date the item was put on the books.  Because fixed assets and inventory are generally accepted at historical costs, the temporal method and the monetary/nonmonetary method will usually provide the same translation.


Related Discussions:- Translation process among the monetary/nonmonetary method

Determine the calculations for the cash flows, The calculations for the cas...

The calculations for the cash flows Actual amount of cash paid or received during the period needs to be established. This can get quite  tricky  as  there  would be  accruals

NPV, Roxanne invested $560,000 in a new business 7 years ago. The business ...

Roxanne invested $560,000 in a new business 7 years ago. The business was expected to bring in $8,000 each month for the next 26 years (in excess of all costs). The annual cost of

Leverage, what is financial leverage

what is financial leverage

Changes in exchange rates, Q. Changes in exchange rates? The law of one...

Q. Changes in exchange rates? The law of one price proposed that identical goods selling in different countries should sell at the same price and that exchange rates relate the

Budget classification on the basis of functions, ON THE BASIS OF FUNCTIONS ...

ON THE BASIS OF FUNCTIONS •Functional / Subsidiary budgets: A subsidiary budget is a budget of income or expenditure appropriate to or the responsibility of functions, like

Explain adjustments necessary to translate enterprise value, Explain the ad...

Explain the adjustments necessary to translate enterprise value to the total present value of common equity. To gain the value of the company's common stock add the value of th

What is bid, Bid The price buyers provide to acquire securities or pri...

Bid The price buyers provide to acquire securities or privacy from sellers.

Objective of working capital management, What is the Objectives of Working ...

What is the Objectives of Working Capital Management? Describe please.

Management, . Why do some organizations seem to have a new CEO every year o...

. Why do some organizations seem to have a new CEO every year or two, whereas others have top leaders who stay with the company for many years (e.g., John Chambers at Cisco)? What

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd