标题: I guess i was wrong.. [打印本页] 作者: torontoanalyst 时间: 2011-7-13 15:06 标题: I guess i was wrong..
In Schweser it says equity is translated with the current rate under CURRENT RATE method.
but I was doing a problem from CFAI and it says equity is translated with historical rate. i was like wtf...
and in the FAS book on page 177, it says equity is translated with the historical rate. C
I am so confused.作者: defour44 时间: 2011-7-13 15:06
help someone? =(作者: DSquaredSlim 时间: 2011-7-13 15:06
thanks BPDULOG!作者: genuinecfa 时间: 2011-7-13 15:06
Multiple things happening here. Please follow along slowly. Very similar to what bpdulog has written above.
1. Current Rate Method
2. All A and L are translated at Current Rate
3. Equity as a whole which is (A-L) would also be translated at the Current Rate.
4. Common Stock, which is a part of equity, is by itself translated at the Historic Rate.
5. So a component of Equity (as a whole translated at Current Rate) is translated at Historic Rate.
6. An additional Component of Equity - the Retained earnings (assuming first year of operation) would be fully Net Income - translated at the Average rate.
How do 4, 5 and 6 tie together? By including the CTA (which could be a gain or a loss) in the Equity.
Does that make sense?
CP作者: SpyAli 时间: 2011-7-13 15:06
common stock - historical
equity = A - L - current rate all of them作者: Pegasus2008 时间: 2011-7-13 15:06
