I thought long term debt was considered a non-monetary asset (just like inventory). But apparently I got a question wrong because under the TEMPORAL method, LTD is considered non-monetary liability?!? What is it under the current method then and where is this detail mentioned in the Schweser notes?
Inventory and Fixed assets = non-monetart ASSETS I have not come across a non-monetary LIABILITY. All Liability should be considerd as monetary (unless otherwise mentioned in the question…)
Sorry I meant monetary. HEre is the answer: “Even though it is a balance sheet account, under the temporal method, long term debt is considered a monetary liability and is translated at the current rate.” It makes it sound like LTD would be considered non-monetary in other cases other than temporal. Can you fill in the gap here?
I think they are just trying to drive home the fact that you don’t use the historical rate like you do for some of the stuff on the asset side like Net PPE and Inventory.