标题: how is accumulated depn translated? [打印本页] 作者: mamuka12 时间: 2011-7-13 14:43 标题: how is accumulated depn translated?
under temporal?
current?作者: profil 时间: 2011-7-13 14:43
Temporal: historical rate (ie when equipment that created the AD was purchased).
Current: Current rate.作者: giorgio10 时间: 2011-7-13 14:43
ya i had thought current rate too, but i thought i read the the I/S was all avg rate in current method.
that is i thought Net income was avg rate even with depreciation
Edited 1 time(s). Last edit at Sunday, May 29, 2011 at 10:12PM by PC79.作者: iteracom 时间: 2011-7-13 14:43
You asked about accumulated depreciation though. That's current rate. The FCT adjustment fills in the difference.作者: ryanlb 时间: 2011-7-13 14:43
Current: average rate作者: firat 时间: 2011-7-13 14:43
Ok now im confused more...
Depreciation is Avg Rate and
Accum Depreciation is current rate???作者: madaochenggong 时间: 2011-7-13 14:44
Yep. That won't balance when translated under changing exchange rates, and that's what the FCT adjustment in S/E is for.作者: scarecrow 时间: 2011-7-13 14:44
just remember that for current rate everything in I/S is translated at Ave. raege except dividents(historical) I/S only contains current depreciation
for B/S everythung under current rate is translated using current rate except equity and B/S contains all accumulated depreciation todate
under temporal everything in I/S is average except COGS, dep, dividends) historical
Everything is historical in B/S except cash assets and liabilities (current)作者: cv4cfa 时间: 2011-7-13 14:44
I think I see where his question comes from...let's say we are asked to translate Net Fixed Assets under Temporal or Current.
You bought first $1000 of Fixed Assets when rate was 0.5
Bought remaining $500 of Fixed Assets when rate was 0.6
Current Rate is 0.7
Current Method:
Simple - just translate Net Fixed Assets at 0.7
Temporal Method:
Not as clear cut. If the question is something like interpreting formula's, then you can discern from pattern of exchange rates that Net Fixed Assets under Temporal would be lower, therefore ratio like Fixed Asset Turnover would be higher. But what if they ask for the precise Net Fixed Assets under Temporal?
My logic - allocate accumulated depreciation proportionally to the two purchases of Fixed Assets. Therefore,
First purchase acc. depreciation = (1000/1500)*(245) = $163
First purchase net fixed asset = 1000 - 163 = 837
Temporal translation first purchase = 837 * 0.5
Similarly for second purchase...and then add both of them up for Net Fixed Asset under Temporal Method.
Disclaimer: This is an educated guess for the approach. not sure if its right - anyone have thots??作者: mp3bu 时间: 2011-7-13 14:44
true enough .. only 2 items at hist in all current method : dividends and Common stock.作者: Rasec 时间: 2011-7-13 14:44
tiredofstudying Wrote:
-------------------------------------------------------
> I think I see where his question comes
> from...let's say we are asked to translate Net
> Fixed Assets under Temporal or Current.
>
> You bought first $1000 of Fixed Assets when rate
> was 0.5
> Bought remaining $500 of Fixed Assets when rate
> was 0.6
> Current Rate is 0.7
>
> Balance Sheet:
> Fixed Assets = $1500
> Accumulated Depreciation = $245
> Net Fixed Assets = $1295
>
> Current Method:
> Simple - just translate Net Fixed Assets at 0.7
>
> Temporal Method:
> Not as clear cut. If the question is something
> like interpreting formula's, then you can discern
> from pattern of exchange rates that Net Fixed
> Assets under Temporal would be lower, therefore
> ratio like Fixed Asset Turnover would be higher.
> But what if they ask for the precise Net Fixed
> Assets under Temporal?
>
> My logic - allocate accumulated depreciation
> proportionally to the two purchases of Fixed
> Assets. Therefore,
>
> First purchase acc. depreciation =
> (1000/1500)*(245) = $163
> First purchase net fixed asset = 1000 - 163 = 837
> Temporal translation first purchase = 837 * 0.5
> Similarly for second purchase...and then add both
> of them up for Net Fixed Asset under Temporal
> Method.
>
>
> Disclaimer: This is an educated guess for the
> approach. not sure if its right - anyone have
> thots??
Sounds logical, but I have not seen it discussed like that. Also, you are assuming accum. deprec. belongs to the two purchases in some proportionate way, which may not be true. So, this is kind of calculating the *average* historical rate.
