Nataja Mumbai Ltd. (A). Nataja Mumbai Ltd., the Indian subsidiary of a Belgian corporation, is a cardiothoracic

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Nataja Mumbai Ltd. (A). Nataja Mumbai Ltd., the Indian subsidiary of a Belgian corporation, is a cardiothoracic instruments manufacturer. Nataja manufactures the instruments primarily for the medical industry globally—though with recent advances in cardiovascular surgery, its business has begun to grow rapidly.

Sales are primarily to hospitals based on Europe and Asia. Nataja Mumbai’s balance sheet in thousands of Indian Rupees (INR) as of March 31 is as follows:

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Using the data presented, assume that the Indian rupee dropped in value from INR59.39/€ to INR79.19/€ between March 31st and April 1st.
Assuming no change in the balance sheet between these two days, calculate the gain or loss from translation by both the current rate method and the temporal method. Explain the translation gain or loss in terms of change in the value of the exposed accounts.

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Multinational Business Finance

ISBN: 9781292270081

15th Global Edition

Authors: David Eiteman, Arthur Stonehill, Michael Moffett

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