11.1 Aidan Turkey (A). Using the facts outlined for Aidan Turkey, assume the exchange rate on January 2, 2016, in Exhibit 11.4 dropped in value from 5.2000/ to +5.5000/ (rather than to 16.0000/). Recalculate Aidan Turkey's translated balance sheet for January 2,2016, with the new exchange rate using the current rate method. a. What is the amount of translation gain or loss? b. Where should the translation gain or loss appear in the financial statements? 11.2 Aidan Turkey (B). Using the facts outlined for Aidan Turkey, assume as in Problem 11.1 that the exchange rate on January 2, 2016, in Exhibit 11.4 dropped from 15.2000/ to 15.5000/ (rather than to 16.0000/). Recalculate Aidan Turkey's translated balance sheet for January 2, 2016, with the new exchange rate using the temporal rate method. a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? c. Why does the translation loss or gain under the temporal method differ from the loss or gain under the current rate method? EXHIBIT 11.4 Aidan Corporation, Selected Financial Results, 2014-2015 Sales Average Exchange Rate (millions, local currency (MYR/C and I 2014 2015 % Change 2014 2015 % Change eland 373.5 400 7.1% Malaysia MYR500 MYR500 0.0% 4.68 4.59 -1.9% Turkey 1885 1800 1.7% 5.78 6.28 8.7% Total Earnings Average Exchange Rate {millions, local currency) (MYR/E and I 2014 2015 % Change 2014 2015 % Change Ireland 37.6 38. 1,4% Malaysia MYR43.75 MYR43.75 0.0% 4.68 4.59 -1.9% Turkey 1.106.0 t.107.1 1.0% 5.78 6.28 8.7% Total Sales (millions of 2014 2015 % Change 63735 400 7.1% 106.8 108.9 2.096 153.1 143.3 -6.4% 133.4 652 2 3.0% Earnings millions of 2014 2015 % Change 37.6 38.1 1.4% 9.3 9.5 2.2% 18.3 17.1 -6.6% 65.2 64.7 -0.8% 11.1 Aidan Turkey (A). Using the facts outlined for Aidan Turkey, assume the exchange rate on January 2, 2016, in Exhibit 11.4 dropped in value from 5.2000/ to +5.5000/ (rather than to 16.0000/). Recalculate Aidan Turkey's translated balance sheet for January 2,2016, with the new exchange rate using the current rate method. a. What is the amount of translation gain or loss? b. Where should the translation gain or loss appear in the financial statements? 11.2 Aidan Turkey (B). Using the facts outlined for Aidan Turkey, assume as in Problem 11.1 that the exchange rate on January 2, 2016, in Exhibit 11.4 dropped from 15.2000/ to 15.5000/ (rather than to 16.0000/). Recalculate Aidan Turkey's translated balance sheet for January 2, 2016, with the new exchange rate using the temporal rate method. a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? c. Why does the translation loss or gain under the temporal method differ from the loss or gain under the current rate method? EXHIBIT 11.4 Aidan Corporation, Selected Financial Results, 2014-2015 Sales Average Exchange Rate (millions, local currency (MYR/C and I 2014 2015 % Change 2014 2015 % Change eland 373.5 400 7.1% Malaysia MYR500 MYR500 0.0% 4.68 4.59 -1.9% Turkey 1885 1800 1.7% 5.78 6.28 8.7% Total Earnings Average Exchange Rate {millions, local currency) (MYR/E and I 2014 2015 % Change 2014 2015 % Change Ireland 37.6 38. 1,4% Malaysia MYR43.75 MYR43.75 0.0% 4.68 4.59 -1.9% Turkey 1.106.0 t.107.1 1.0% 5.78 6.28 8.7% Total Sales (millions of 2014 2015 % Change 63735 400 7.1% 106.8 108.9 2.096 153.1 143.3 -6.4% 133.4 652 2 3.0% Earnings millions of 2014 2015 % Change 37.6 38.1 1.4% 9.3 9.5 2.2% 18.3 17.1 -6.6% 65.2 64.7 -0.8%
