Dear All,
CFAI Book #2 Page 288 EOC Question #8.
Why did they use the Exchange Rate on 31 December 20X1 (0,86) to translate the nonmonetary assets-liabilities for the 20X2 Balance Sheet, and not the Exchange Rate on 31 December 20X2?
Second question: Where did they get the common stock exchange rate from?
Thanks,
Gabriel
Because under the temporal method, Non-monetary assets are translated at the historical rate. Common (capital) stock is also translated at the historical rate under the temporal method.
Because under the temporal method, non-monetary assets not measured at current value and common stock are translated at historical rates.