Current Rate Method

Temporal Method

Using the translated balance sheet under the current rate method, what is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss.

$____

Using the translated balance sheet under the temporal method, what is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss.

$____

The ____ results in a translation gain, as opposed to the CTA loss found under the ____, because of the different exchange rates used against net plant and equipment and the inventory line items. This gain would be impossible under the ____ because all assets are exposed under that method, whereas the ____ carries net plant and equipment and inventory at relevant historical exchange rates.

Bangkok Instruments, Ltd.(A). Bangkok Instruments, Ltd., the Thai subsidiary of a U.S. corporation, is a seismic instrument manufacturer. Bangkok Instruments manufactures the instruments primarily for the oil and gas industry globally, though with recent commodity price increases of all kindsincluding copper-its business has begun to grow rapidly. Sales are primarily to multinational companies based in the United States and Europe Bangkok Instruments balance sheet in thousands of Thai bahts B) as of March 31 is shown in the popup window. Exchange rates for translating Bangkok Instruments' balance sheet into U.S. dollars are B45 33/S April 1 exchange rate, after 25% devaluation 834 00/S March 31 exchange rate, before 25% devaluation All inventory was acquired at this rate B25.00S Historic exchange rate at which plant and equipment were acquired The Thai baht dropped in value from B34.00/S to B45.33/$ between March 31 and April 1. Assuming no change in balance sheet accounts between these two days, calculate the gain or loss from translation by both the current rate method and the temporal method. Bangkok Instruments' translated balance sheet using the current rate method is shown here, , and the one using the temporal method is shown here, EEB Explain the translation gain or loss in terms of changes in the value of exposed accounts