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

Explain gresham’s law, Explain Gresham’s Law. Answer:  Gresham’s law cons...

Explain Gresham’s Law. Answer:  Gresham’s law considers to the phenomenon that bad (abundant) money drives good (scarce) money out of circulation. This type of phenomenon was fre

Major advantages of preparing a statement of cash flow, QUESTION 1 ...

QUESTION 1 Part A i) Define the terms finance lease and operating lease and explain how you would distinguish between the two leases ii) When accounting for fina

Interest rate risk for floating-rate securities, In a fixed-rate coup...

In a fixed-rate coupon bond, the change in the price can be attributed to the change in the market interest rates. This change is due to the difference in the pre

Differance between forward start option and a package, 1 Explain the differ...

1 Explain the difference between a forward start option and a package. Outperformance certificates are offered to investors by many European banks as a way of investing in a com

Differentiate between systematic and unsystematic risk, QUESTION a) Dis...

QUESTION a) Discuss the importance of diversification in the context of stock markets using appropriate numerical illustrations. b) Mimine and Minush are two companies with

Example on cash flow diagram, (a) A usual cash flow diagram will incorporat...

(a) A usual cash flow diagram will incorporate the following. If you are short the CDO and then you receive a fixed amount at the initial point t o . After that you make paymen

Define the meaning of procurement, Define the meaning of procurement T...

Define the meaning of procurement Term procurement was used in a broad sense so as to include the whole gamut of raising funds externally.

Relationship between spot rates and short-term forward rates, Assume ...

Assume that an investor invests $X in a 3-year zero coupon Treasury security. Three years from now, the total return received would be:

Explain the term- quality of decisions, Explain the term- quality of decisi...

Explain the term- quality of decisions Performance and business risk This is focussed on " quality of decisions ". The comparison of an organisations performance with t

Globalization of financial markets, Floria Scarpia believes that many of he...

Floria Scarpia believes that many of her clients could benefits from using international investments to diversify their portfolios but many are reluctant to invest abroad -especial

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