The translation method which uses as the basis for its logic that financial assets and liabilities have similar attributes and should be translated at the same exchange rate is the
A) current-noncurrent method.
B) monetary-nonmonetary method.
C) temporal method.
D) current rate method.

Question

Quizplus · Accepted Answer

The method described is the monetary-nonmonetary method, which classifies assets and liabilities as either monetary or non-monetary and translates them at different exchange rates. It is based on the recognition that monetary items, i.e. those with fixed or determinable payments, are sensitive to changes in exchange rates whereas non-monetary items, i.e. those with variable payments, are not.

The Translation Method Which Uses as the Basis for Its