Hello Everyone,
Can anyone please help me to understand that “how by bringing the translation gain/loss (CTA) in income statement improves comparison with temporal method” ?
thanks!
Under the temporal method the remeasurement gain/loss appears on the income statement. By moving ΔCTA (under the current rate method) to the income statement, you have eliminated one of the differences: the foreign currency gain/loss is now on the income statement for both.
However, because there are so many differences in the exchange rates used, the two methods may still not be comparable.