Question

What are the differences between using All current method and Temporal method?

Answer 1

Differences between using all current method and Temporal method are:-

Current Method	Temporal Method
Translation of assets and liabilities are done at Current Date i.e. on Balance sheet date.	Assets and liabilities are translated via two methods:- a) Monetory method- translates @ current rate b) Non monetory method- translate @ historical rate
Income and expenses are translated at rate of actual date of event occurance	Income and expenses are translated at average rate
Distribution of dividend is translated at the rate on which payment is made	Distribution of dividend is translated at the rate on which payment is made
Common stock and paid in capital @ historical rates	Common stock and paid in capital @ historical rates
Translation adjustments are included in equity reserve account	Unrealized gain/loss on forex is treated as primary earning