Can anyone explain how the current rate method does not ignore the "unrealized" gains and losses on the non-monetary assets and liabilities. The focus is on unrealized...Many thanks in advance!

Temporal is primarily historical rate driven so exchange rate changes don't create as much exposure. I'm only a candidate like you so not 100% in my answer but think it's along those lines.

Well for starters, fixed assets are translated at the current rate. Pretty much everything is. So alot of the CTA is unrealized gains/losses because you wouldn't realize that exchange rate exposure until it's sold or bought.

A CFA Level 2 Discussion About Multinational Operations

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This topic has 2 replies, 2 voices, and was last updated Sep-187:46 am by googs1484.

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- googs1484
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  08 Sep 2018 at 7:46 am
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  Temporal is primarily historical rate driven so exchange rate changes don’t create as much exposure. I’m only a candidate like you so not 100% in my answer but think it’s along those lines.
- googs1484
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  08 Sep 2018 at 2:47 am
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  Well for starters, fixed assets are translated at the current rate. Pretty much everything is. So alot of the CTA is unrealized gains/losses because you wouldn’t realize that exchange rate exposure until it’s sold or bought.
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