Is BalanceSheet exposure net asset or Net Non Monetary assets if you change functional currency?
It really depends on the change
Under Current Rate method (when LC = FC)
You have net asset balance sheet exposure (since you translate both asset and liabilities with the new rate)
Under Temporal method (when PC = FC)
You have net MONETARY balance sheet exposure (since you translate only the monetary assets and liabilities with the new rate while non-monetary assets/liabilities are translated using the old rate)
Well said… got it now.
Thank you!
Under Current rate method net balance sheet exposure is counted when Local currency = Foreign Currency .
Under Temporal method Net monetary balance sheet exposure is counted
More accurately, when functional currency ≠ presentational currency.