Under section 3.2 when the two methods are introduced:
"Although neither the IASB nor the FASB specifically refer to translation methods by name, the procedures specified by IFRS and US GAAP for translating foreign currency financial statements essentially require the use of either the current rate or the temporal method. "
I’m thinking, okay lets move on to when to use each method… I learn up on the ways to determine which method to use… Then I get to Blue Box example 4. The solution to approach 1 which is about the current rate methods reads, “Because this method accounts for adjustments in exchange rates but does not account for likely changes in the local currency values of assets, it does a poor job of accurately reflecting the economic reality of situations such as the one in our example. That is the major reason this approach is not acceptable under either IFRS or US GAAP.”
What? So current rate method is just never used period? So why does it exist, why would we learn it, and why didnt they mention this when they introduced the method earlier in the text. Am I missing something?
Thanks.