Which of the following is true for the exchange rate used to translate long-term receivables?
A) Current exchange rate under both current rate method and temporal approach.
B) Current exchange rate under current rate method and historical rate under the translation method.
C) Historical exchange rate under current rate method and current rate under the translation method.
D) Historical exchange rate under both current rate method and temporal approach.

Question

Quizplus · Accepted Answer

Under both the current rate method and the temporal approach, long-term receivables are translated at the current exchange rate. This is because the value of these receivables can fluctuate with changes in the exchange rate, and using the current rate provides the most accurate reflection of their value in the reporting currency at the balance sheet date.

Which of the Following Is True for the Exchange Rate