Hi
1.Can some one tell me what rate should be used for COGS and Inventory under Temporal Method ? Every book seems to be confusing me,
- What is the logic behind these upstreme and downstreme transactions??
if FIFO - use current rate
if LIFO - use the rate as at when the inventory was bought.
All non-monetary assets (inventory) remeasured at historical rates (the actual rate used to purchase it). However, any inventory carried at fair value is remeasured at current rate.
So inventory and COGS remeasured at historical rates (that which was in effect when they were purchased).
If you don’t remove the effect of unconfirmed profit from the parent’s (in downstream) or sub’s (in upstream) P&L it gets double-counted in the consolidation.
S2000 must be teaching this weekend…