xilinx_altera

I am not studying, but I ll take this opportunity to practice.

Begin rate: Parent currency 1.0/local currency
End rate: PC0.5/LC
avg rate: 0.75
--> LC depretiating, PC appretiating.
under current rate we use avg rate for COGS.

Local subsidiary cogs: 100
Temporal method translation using historic: 100 x 1 = 100 cogs in PC
Current method translation using avg rate: 100x 0.75=75 cogs in pc.
pc will have lower cogs and higher profit.

In the EOCs, FIFO and LIFO are also being considered.
Incorporating FIFO and LIFO in the same problem:
remember in this case, LC depretiating. Recall from level 1,
under deflationary environment,
LIFO produces lowest COGS, FIFO produces highest COGS.
So in this case, combining 2 effects of inventory valuation plus currency translation,
LIFO + current method will give us the lowest translated cogs and highest profit.



Edited 1 time(s). Last edit at Thursday, May 19, 2011 at 01:40AM by passme.