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.