Case 16-6 Foreign Currency Translation: Various Methods

Several methods of trranslating foreign currency transactions or accounts are reflected in foreign currency financial statements. Among these methods are the current-noncurrent, monetary-nonmonetary, current rate, and temporal methods.

Required:

Define the temporal method of translating foreing currency financial statements. Specifically include in your answer the treatment of the following four accounts:

a. Long-term accounts receivable

b. Deferred Income

c. Inventory valued at cost

d. Long-term debt