# Current vs Temporal Question

Under the current method, net exposure to currency changes is the net asset. Net exposure under the temporal method is net monetary assets. My question, can you calculate the CTA or remeasurement based on the net asset or net monetary asset, w/o using the NI statement? Thanks!

No, you will have to convert it with both of them to get the respective CTA or the remeasurement gain. To get the CTA adjustment you need to know the ending balance of retained earnings, so you would have to convert the income statement in order to know net income in order to calculate the ending balance of retained earnings which would then be a plug on the balance sheet. To get the remeasurement gain under the temporal method you first convert the balance sheet and you would calculate the ending balance of retained earnings through the conversion (after converting the accounts, it would be the difference between assets and (liabilities + capital stock). You would then have to derive net income on the income statement with your result from the ending balance of retained earnings (beg bal RE +NI - Divs +End bal of RE). So then you would Then your remeasurement gain is the difference between net income that you would derive from the ending balance of retained earnings and the net income you get from doing income statement conversions. Hope that makes sense. A helpful thing I learned is that it’s easier to start with income statement conversions with the current rate method and it’s easier to start with the balance sheet under the temporal method. The most likely scenario is that they have us calculate this using the current rate method.

Good explanation - thanks.