ECONOMIC CONSEQUENCES. Sumber Utama (Scott, Bab 8). Outline Kuliah: Pendahuluan Mengapa EC Muncul? EC: SFAS 8 dan SFAS 52 Hubungan EC dan Pasar Modal Efisien Rekonsiliasi EC dan Pasar Modal Efisien. PENDAHULUAN.
Sumber Utama (Scott, Bab 8).
Spot exchange rate
Book value of inventory historic rate
Book value of inventory at spot exchange rate
Current value of inventory at spot exchange rate.
spot exchange rate.
From income statement
Under the current rate method, a “plug” equity account named cumulative translation adjustment makes the balance sheet balance.
Sales translate at average exchange rate over the period, DM2.50 = $1
Translate at DM2.50 = $1
Translate at new exchange rate, DM2.00 = $1
Translate at DM3 = $1
Translate at average exchange rate, DM2.5 = $1
Note the effect on after-tax profit.
Note the effect that foreign exchange gains (losses) has on net income.