b_sea93

1. temporal ( currency risk exposure is only for monetary assets and liabilities)
if you have a net monetary asset position in the foregn currency a depreciating foregn currency will result in a loss

for net monetary liability you want the foreign currency to depreciate because you will post a gain in translation.

results in translation gain or loss in the income statement

2. current rate ( all assets and liabilities are exposed )

A- L= Equity
usually positive
so it should usually be a gain when currency appreciates and a loss when it depreciates

results in cumulative translation adjustment in OCI