One of your friends has missed a couple of consolidations classes due to illness. She was reading through the professors PowerPoint slides and was confused as to why the appreciation of the Canadian dollar (relative to the US dollar) can result in a foreign exchange gain in one case and a foreign exchange loss in another case. Briefly describe what these cases are (i.e. temporal/current rate method) and why one case gives rise to a foreign exchange gain while the other gives rise to a foreign exchange loss.

Upon further reflection, she is also confused as to why in one instance, the foreign exchange gain/loss goes directly to the income statement whereas in the other case, the foreign exchange gain/loss is recorded in other comprehensive income. Briefly explain to her how this can be