Using the temporal method, monetary accounts, such as cash, are translated at the current spot exchange rate are not translated. are translated at the average exchange rate prevailing over the reporting period. are translated at the current forward exchange rate Translation exposure refers to all of the options accounting exposure. the effect that an unanticipated change in exchange rates will have on the consolidated financial reports of an MNC the change in the value of a foreign subsidiaries assets and liabilities denominated in a foreign currency as a result of exchange rate change fluctuations, when viewed from the perspective of the parent firm