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

Business organization, what business organization do you preffer ? service ...

what business organization do you preffer ? service concern,trading concern or manufacturing concern

Describe what is meant by application controls, QUESTION An audit team...

QUESTION An audit team is currently engaged in planning the audit of the financial statements of E Limited as at 30 June 2007. This was the first accounting period during which

Tests for consistency, Tests for Consistency The consistency of the ind...

Tests for Consistency The consistency of the index numbers have been tested over the years. The most important of these tests are: The time reversal test The

Estimate incremental cash flows, You just recently joined Manawatu Blinds a...

You just recently joined Manawatu Blinds and Curtains (MBC) group, a partnership firm based in Manawatu region providing windows, dressings, and installations to both commercial an

What are the major sections of the statement of cash flows, What are the ma...

What are the major sections of the statement of cash flows? a.Cash flows from Operations b.Cash flows from investing activities c.Cash flows from financing activities

Underwrite, Under write An arrangement under which the investment b...

Under write An arrangement under which the investment banks agree to purchase a certain amount of privacy of a new issue (typically an IPO) at a given date for a given pric

Determine the cost of capital in emerging nation, How can we measure a comp...

How can we measure a company's cost of capital in emerging nations, especially when there is no state bond which we could take as a reference? Although there is no state bond w

Relationship between bond price and time, Relationship between Bond Price a...

Relationship between Bond Price and Time   (If Interest Rates are Constant) The bond price changes as the bond moves closer to its maturity. If the bond is quoted

Cost of capital, discuss the cost of capital in finance

discuss the cost of capital in finance

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