CFAI Reading 21 EOC question 2

CFA Level II FRA
#1

The soluntion states: “the current rate method will give higher gross profit to the parent if the subsidiary’s currency is depreciating”

This seems to contradict what’s in Example 6 and Exhibit 5

Is this because it’s related to inventories specifically and so COGS is lower and therefore gross profits higher?

tia

#2

Hi,

I’m struggling on this one too. Not clear cut in my mind. Did you figure it out?

Thanks

G.