Can you clear up the confusion I have bout this formula? where, return, foreign, domestic, confusion

Viceroy

Two formulas for domestic return on a foreign portfolio:

1) Return=Capital Gain + Currency Appreciation + (Capital Gain)(Currency Appreciation)
2) Return=Capital Gain + Income Yield +Currency Effect,
where Currency Effect=e*(1+Capital Gain+Income Yield).

When do I use 1) or 2)?