Multinational operations - inventory purchase

CFA Level II FRA
#1

Hi folks,

Here is the background info:

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Here is the question and the options:

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I have the following clarifications:

  • Is (A) wrong because 15 November 2014 is not a balance sheet date? Under the CR method, wouldn’t inventory be valued over time using the current FX?
  • Why is (B) wrong? If the payable is only paid on 15 Nov, wouldn’t there be a FX gain/loss between 31 Oct and 15 Nov? In this case, wouldn’t the gain/loss accrued between 31 Oct and 15 Nov be reported in fiscal 2015 net income? Or is (B) wrong because the option says “ALL gains or losses…”, but only a portion of the gains/losses will be reflected in fiscal 2015 net income?

Thanks!