TAILIEUCHUNG - Lecture International financial management: Chapter 11 - Management of translation exposure

Invite you to consult the content chapter 11 "Management of translation exposure" of lecture International financial management below to capture the content: Alternative currency translation methods, translation exposure, financial statement impact of translation alternative,. | CHAPTER ELEVEN MANAGEMENT OF TRANSLATION EXPOSURE ON EXPOSURE Changes in income statement items and the book value of balance sheet assets and liabilities that are caused by an exchange rate change. ALTERNATIVE CURRENCY TRANSLATION METHODS Current noncurrent method current asset liability are translated at the current ER noncurrent asset liability are translated at the historical ER Most income statement items are translated at the average ER. ALTERNATIVE CURRENCY TRANSLATION METHODS Monetary nonmonetary method Monetary items cash account payables and receivable and long-term debt are translated at the current rate Nonmonetary items inventory fixed assets and longterm investment are translated at the historical rates Income statement items are translated at average exchange rate during the period except for revenue and expense items related to nonmonetary assets and liability 1 ALTERNATIVE CURRENCY TRANSLATION METHODS Temporal method This method appears to be a modified version of monetary non-monetary method. The only difference inventory is always translated at the current rate ALTERNATIVE CURRENCY TRANSLATION METHODS Current rate method All balance sheet and income items are translated at the current rate IMPACT OF TRANSLATION ALTERNATIVE Monetary Non Temporal Cu rrent N on cu rrent Current Assets Cash market securities Inventory at market Prepaid expenses . .. total current assets Fixed asset - Dep. Goodwill Total assets Liabilities Current liabilities Longterm debt SBSBBBS Deferred income taxes Total liabilities Capital stock Retained earnings Total equity Total liabilities equity Translation gain loss T IMPACT OF TRANSLATION ALTERNATIVE FC4 1 FC 5 1 Monetary Temporal Current non Current rate Assets FC us us us us us Cash 2 600 650 520 520 520 520 Inventory at market 3 600 900 900 720 720 720 Prepaid expenses 200 50 50 50 40 40 total current assets 6 400 1 600 1 470 1 290 1 280 1 280 Fixed asset - Dep. 3 600 900 900 900 900 720 .

• Tài chính doanh nghiệp
• Lesson International financial management
• International financial management
• Management of translation exposure
• Translation Exposures
• Alternative currency translation methods
• Translation exposure
• Globalization Multinational Firm
• The Multinational Firm
• Multinational Corporations
• Foreign Exchange Risk
• The Balance of Payments
• Balance of Payments Accounting
• Balance of Payments Accounts
• Balance of Payments Identity
• Foreign currency futures market
• Futures Currency
• Currency Swaps
• Swap bank
• Swap transaction
• Currency swap
• Transaction Exposure
• Operation exposure
• Quản lý tài chính quốc tế
• Lecture International financial management
• Managing economic exposure
• Hedging economic exposure
• Financial management
• Multinational financial management
• Quản lý tài chính
• Quản lý tài chính đa quốc gia
• Multinational finance
• Managing translation exposure
• Global finance
• Global financial management
• Lecture Global financial management
• Competitive exposure
• Real currency appreciation
• Managing translation
• Risk management
• Financial risks management
• Lecture Financial risks management
• Quản trị rủi ro
• Quản trị rủi ro tài chính
• International accounting
• Lecture International accounting
• Foreign currency financial statements
• Translation methods
• Current rate methods
• Balance sheet exposure
• Foreign exchange
• Foreign exchange risks