Local currency = Malaysian Ringgit Functional curency = Singaporean Dollar Presentation currency = US Dollar.
I would use All Current and the Singaporean Dollar.
If the Signaporean dollar is used in Asia (pardon my international currency ignorance), then you would be translating from Functional to Reporting/Presenation which would be All Current?
If the Signaporean dollar is used in Malaysia (pardon my international currency ignorance), then you would be translating from Functional to Reporting/Presenation which would be All Current?
PC = USD FC = SD LC = MR If it gets as complicated as above, then there are 2 steps to follow. Step1: Remeasure from MR to SD by using Temporal method Step2: Translate from SD to USD using All Current method
I haven’t seen a question like this, but I’d say it’s fair game. A U.S. parent company runs its Malaysian subsidiary from Singapore (those two countries are very close to each other), where the functional currency is Singaporean dollar.
whats swaption said. this would be pretty mean of them… but it is CFAI
Is there a table or something similar anywhere (schweser, cfa, etc) that shows when to use which method?
schweser does show this … in a figure in the 2nd or 3rd page of the chapter. LC->FC=PC Current Rate LC=FC->PC Temporal LC->FC->PC Current Rate then Temporal (This is the case you are discussing here).
> LC->FC->PC Current Rate then Temporal (This is the case you are discussing here). Hey CP - should it be the other way round? 1st Temporal and then All Current (as listed in my prior post?)
I am getting confused all the way around… need to take a break, but I am afraid to.
cpk, I actually did’t know the answer to this! But the way swaption put it makes perfect sense. Since LC Not= FC, use temporal to convert MR to SD. Since FC Not= PC, use All-Current to convert from SD to USD. You can’t start with All-Current because LC Not= Fc
SG is right on that, I just looked at it in the book.