Why would some companies decide to use an average rate for each week or month for translating foreign currency transactions?
Answer to relevant QuestionsWhat is the purpose of hedging?What is hedge accounting?Polar Limited is a Canadian company that recently completed two large transactions with companies based in Germany:1. On July 1, 20X4, Polar acquired equipment at a cost of € 500,000 from Bier Ltd. Polar received ...On October 15, 20X1, Nahanni Limited sold merchandise to two companies in Sweden. In the first transaction, the price was 3,000,000 kronor and was to be paid in 90 days. Worried about the exposure to the exchange risk, the ...Forop Ltd. is a foreign subsidiary of Domop Inc. Domop’s accounting exposure to exchange rate changes when translating the accounts of Forop is a substantial net liability exposure. Domop’s management expects the foreign ...
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