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Cumulative Translation

Once you translate your BS and IS using the temporal method, how do you know whether you have a net asset exposure or a net liability exposure? 

"indispensable down the final stretch and had a HUGE impact on my studies." - Christopher, USA

You do the math on the local currency, not on the translated.

If your monetary asset is 500 and your monetary liability is 1000, then you have a net liability exposure of 500. 

You know even before translation.. If your monetary assets exceed monetary liabilities you have a net monetary asset exposure. However if this is not the case you have a net monetary liability exposure