Can anyone pls quickly summarize this issue:
when a company hold net asset or net monetary asset, then FC appreciate will result in a gain
vice versa for liabilities, when hold net liabilities or net monetary liabilities, fc appreciate result in a loss
this applies to both temporal or current translation and applies to both sub and parent company
yes?
the next question will be how to reduce the exposure. since the exposure is net asset or net monetary asset, i imagine we need to increase the liabilities to offset it. yes ? how do we increase liabilities ? issue bonds and use that money to buy new assets … or something like that ? or we can reduce the asset by selling it … ?
ok found this
current rate / temporal method
FC
Appreciate Depreciate
net A gain loss
net L loss gain