Chap14ManagementofTranslationExposure国际财务管理英文版课件

INTERNATIONAL
FINANCIAL
MANAGEMENT
EUN/RESNICK
SecondEdition
14
ChapterFourteen
ManagementofTranslationExposure
ChapterObjective:
Thischapterdiscusstheimpactthatunanticipatedchangesinexchangeratesmayhaveontheconsolidatedfinancialstatementsofthemultinationalcompany.
INTERNATIONALEUN/RESNICKSeco
ChapterOutline
TranslationMethods
FASBStatement8
FASBStatement52
ManagementofTranslationExposure
EmpiricalAnalysisoftheChangefromFASB8toFASB52
2
ChapterOutlineTranslationMet
TranslationMethods
Current/NoncurrentMethod
Monetary/NonmonetaryMethod
TemporalMethod
CurrentRateMethod
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TranslationMethodsCurrent/Non
Current/NoncurrentMethod
Theunderlyingprincipalisthatastsandliabilitiesshouldbetranslatedbadontheirmaturity.
Currentaststranslatedatthespotrate.
Noncurrentaststranslatedatthehistoricalrateineffectwhentheitemwasfirstrecordedonthebooks.
ThismethodofforeigncurrencytranslationwasgenerallyacceptedintheUnitedStatesfromthe1930suntil1975,atwhichtimeFASB8becameeffective.
4
Current/NoncurrentMethodTheu
Current/NoncurrentMethod
Currentaststranslatedatthespotrate.
e.g.DM2=$1
Noncurrentaststranslatedatthehistoricalrateineffectwhentheitemwasfirstrecordedonthebooks.
e.g.DM3=$1
5
Current/NoncurrentMethodCurre
Monetary/NonmonetaryMethod
Theunderlyingprincipalisthatmonetaryaccountshaveasimilaritybecautheirvaluereprentsasumofmoneywhovaluechangesastheexchangeratechanges.
Allmonetarybalancesheetaccounts(cash,marketablecurities,accountsreceivable,etc.)ofaforeignsubsidiaryaretranslatedatthecurrentexchangerate.
Allother(nonmonetary)balancesheetaccounts(owners’equity,land)aretranslatedatthehistoricalexchangerateineffectwhentheaccountwasfirstrecorded.
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Monetary/NonmonetaryMethodThe
Monetary/NonmonetaryMethod
Allmonetarybalancesheetaccountsaretranslatedatthecurrentexchangerate.e.g.DM2=$1
Allotherbalancesheetaccountsaretranslatedatthehistoricalexchangerateineffectwhentheaccountwasfirstrecorded.e.g.DM3=$1
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Monetary/NonmonetaryMethodAll
TemporalMethod
Theunderlyingprincipalisthatastsandliabilitiesshouldbetranslatedbadonhowtheyarecarriedonthefirm’sbooks.
Balancesheetaccountaretranslatedatthecurrentspotexchangerateiftheyarecarriedonthebooksattheircurrentvalue.
Itemsthatarecarriedonthebooksathistoricalcostsaretranslatedatthehistoricalexchangeratesineffectatthetimethefirmplacedtheitemonthebooks.
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TemporalMethodTheunderlying
TemporalMethod
Itemscarriedonthebooksattheircurrentvaluearetranslatedatthespotexchangerate.
e.g.DM2=$1
Itemsthatarecarriedonthebooksathistoricalcostsaretranslatedatthehistoricalexchangerates.
e.g.DM3=$1
9
TemporalMethodItemscarriedo
CurrentRateMethod
Allbalancesheetitems(exceptforstockholder’quity)aretranslatedatthecurrentexchangerate.
Verysimplemethodinapplication.
A“plug”equityaccountnamedcumulativetranslationadjustmentisudtomakethebalancesheetbalance.
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CurrentRateMethodAllbalance