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

Define and discuss indirect world systematic risk, Define and discuss indir...

Define and discuss indirect world systematic risk. The indirect world systematic risk can be illustrated as the covariance among a nontradable asset and the world market portfo

What is business risk, What is Business risk It is related to response ...

What is Business risk It is related to response of the firm's earnings before taxes andinterest, or operating profits, to changes in sales. When cost of capital is used to eval

Relationship between financial decision making and risk , Discuss the relat...

Discuss the relationship between financial decision making and risk and return. Would all financial managers view risk-return tradeoffs similarly

Profit and loss statement, Profit and Loss statement:   The Profit and L...

Profit and Loss statement:   The Profit and Loss statement is the primary measure of business performance.  As the name suggests, this particular report measure whether the b

Stakeholders, identify five stakeholder groups and breifly explain their fi...

identify five stakeholder groups and breifly explain their financil and other objectives

Aeromag, Our geologist, Rebecca Paulka, has estimated from the earlier expl...

Our geologist, Rebecca Paulka, has estimated from the earlier exploration that the Malian prospects have a 30% likelihood of containing economic quantities of uranium ore, the Nige

Interpretations of short term solvency or liquidity ratio''s, Short Term So...

Short Term Solvency or Liquidity Ratio's   CR:          The Current Ratio is calculated by current assets to current liabilities and is the index of company's financial stab

Discuss about stock market and stock exchanges , Successful managers and in...

Successful managers and investors understand the various financial markets and the investments these markets offer. A good understanding of potential gains and losses, as well as t

Determine the limitations of the traditional approach, Determine the Limita...

Determine the Limitations of the traditional approach Limitations of the traditional approach were not entirely based on treatment or emphasis of different aspects. In other wo

Finance, a) Describe five factors that should be taken into account by a bu...

a) Describe five factors that should be taken into account by a businessman in making the choice between financing by short-term and long-term sources.

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