Accounting Essay Example | Topics and Well Written Essays - 250 words - 15

Accounting - Essay Example In the temporal method, accounts and cash receivables are the main and only assets changed in the current exchange rate. Longer term debt and accounts payable are also changed at the current exchange rate. Due to the reasons that polish zloty liability amounts change at exchange rate surpasses the zloty asset amounts changed in the exchange rate, there is an existence of a net liability exposure. Measurement loss in the third of part 1 increases due to two reasons: there a net asset exposure in the balance sheet and depreciation of the polish zloty against U.S dollar in the second year. Account and receivables accounts are the main assets changed at the exchange rate. As there is no longer term debt in this part, the only liability changed at the exchange rate is accounts payable. As the polish zloty assets amount changed at the exchange rate surpasses polish zloty liability amount changed at the exchange rate, there exists an exposure of net asset in the balance