CFA CFA Level 2 Multinational operations – FRA

Multinational operations – FRA

  • This topic has 2 replies, 2 voices, and was last updated Sep-18 by googs1484.
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    • Ankita
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      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!

    • googs1484
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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.

    • googs1484
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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.

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