Case 4 relates to an eco experiencing hyper-inflation & now the translation is to be done, I’ve a series of doubts in this:
- In case of US GAAP we consider Reporting Currency(RC) = Functional Currency(FC) i.e., we convert Non-Monetary A/L at historical rates but what about Monetary A/L(MA/L)?
If we convert them at Current Rate as done in case of Temporal Method won’t the asset/liability vanish?
- In case of IFRS, we don’t adjust MA/L due to inflation, still while we translate we do it at the current rate so will not the MA/L vanish due to that?
Please help me understand this & correct wherever my understanding is wrong. Thank you!