Allright, I know this has been asked several times, but I am still having major difficulties grasping the subject. In terms of Temporal method when do we use the avg rate instead of the historical rate (what I mean is what is the question going to say). In terms of all-current method when do we use any other quote besides the average exchange rate for the year. thanks and sorry for the redundancy



One question that I couldn’t figure it out. So we have discussed that under temporal method, we use historical rate for COGS, but if inventories were acquired evenly throughout the year then we ust use average rate. What about Inventory? Do we also use average rate as well if under temporal and the assumption that inventories were acquired evenly throughout the year?

yep, I think you do.

I think Beginning inventory is always at historical rate but Purchases and Ending Inventory use average rate and COGS is then a plug figure so effectively COGS is also being remeasured at approximate historical rate (which I would think could be taken as average rate). HTH, -Amit