morning 43 ans says
FASB requires that the temporal method be used for subsidiaries during periods of normal inflation, and the current rate method be used during periods of hyperinflation.
is that wrong here? the book said during hyperinflation GAAP would use termporal method,
From memory
IFRS adjusts for inflation, then uses current method
USGAAP uses temporal
So yeah, it must be a mistake
but the funny thing is I reported to CFAI, they said the ans is right.
wdf…
20% per 3 years, not hyperinflation so no adjustments
I agree that there wasn’t actually an inflationary environment due to it being lower than 26%, but it doesn’t change the fact that the explanation still appear incorrect. During hyperinflation under USGAAP, temporal should be used, not current
“FASB requires that the temporal method be used for subsidiaries during periods of normal inflation, and the current rate method be used during periods of hyperinflation.”
CFAI took a week to respond, only says the q and ans are correct as written. 