Reading 26- LOS e ～ Q1

1．Which of the following currency translation methods is most appropriate in a hyperinflationary economy? The:

A)   all-current method since the translation gain or loss is shown on the income statement.

B)   monetary/non-monetary methods because you would be re-measuring assets at the current rate.

C)   temporal method because all non-monetary accounts are translated at the historical rate.

D)   current/non-current method since current assets and liabilities are translated at the current exchange rate.

The correct answer was C)

Temporal is most appropriate because the value of non-monetary assets and liabilities is translated at the historical rate.