【正文】 translated at the current rate. Nonmoary items—fixed assets, longterm investments, and inventoriesare translated at historical rates. Ine statement items are translated under procedures similar to those described for the currentnoncurrent framework. Unlike the currentnoncurrent method, this method views moary assets and liabilities as exposed to exchange rate risk. Since moary items are settled in cash, use of the current rate to translate these items produces domestic currency equivalents that reflect their realizable or settlement values. It also reflects changes in the domestic currency equivalent of longterm debt in the period in which they occur, producing a more timely indicator of exchange rate effects. Note, however, that the moarynonmoary method relies on a classification scheme to determine appropriate translation rates. This may lead to inappropriate results. For example, this method translates all nonmoary assets at historical rates, which is not reasonable for assets stated at current market values (such as investment securities and inventory and fixed assets written down to market). Multiplying the current market value of a nonmoary asset by a historical exchange rate yields an amount in the domestic currency that is neither the item’s current equivalent nor its historical cost. This method also distorts profit margins by matching sales at current prices and translation rates against cost of sales measured at historical costs and translation rates. Temporal method With the temporal method, currency translation is a measurement conversion process or a restatement of a given value. It does not change the attribute of an item being measured。 it only changes the unit of measure. Translation of foreign balances restates the currency denomination of these items, but not their actual valuation. Under . GAAP, cash is measured in terms of the amount owned at the balance sheet date. Receivables and payables are stated at amounts expected to be received or paid when due. Other assets and liabilities are measured at money prices that prevailed when the items were acquired or incurred (historical prices). Some, however, are measured at prices prevailing as of the financial statement date (current prices), such as inventories under the lower of cost or market rule. In short, a time dimension is associated with these money values. In the temporal method, moary items such as cash, receivables, and payables are translated at the current rate. Nonmoary items are translated at rates that preserve their original measurement bases. Specifically, assets carried on the foreign currency statements at historical cost are translated at the historical rate. Why? Because historical cost in foreign currency translated by a historical exchange rate yields historical cost in domestic currency. Similarly, nonmoary items carried abroad at current values are translated at the current rate because current value in foreign currency translated by a current exchange rate produces current value in domestic currency. Revenue and expense items are translated at rates that prevailed when the underlying transactions took place, although average rates are suggested when revenue or expense transactions are voluminous. When nonmoary items abroad are valued at historical cost, the translation procedures resulting from the temporal method are virtually identical to those produced by the moarynonmoary method. The two translation methods differ only if other asset valuation bases are employed, such as replacement cost, market values, or discounted cash flows. Because it is similar to the moarynonmoary method, the temporal method shares most of its advantages and disadvantages. In deliberately ignoring local inflation, this method shares a limitation with the other translation methods discussed. (Of course, historical cost accounting ignores inflation as well!). All four methods just described have been used in the United States at one time or another and can be found today in various countries. In general, they produce noticeably different foreign currency translation results. The first three methods (., the current rate, currentnoncurrent, and moarynonmoary) are predicated on identifying which assets and liabilities are exposed to, or sheltered from, currency exchange risk. The translation methodology is then applied consistent with this distinction. The current rate method presumes that the entire foreign operation is exposed to exchange rate risk since all assets and liabilities are translated at the yearend exchange rate. The currentnoncurrent rate method presumes that only the current assets and liabilities are so exposed, while the moarynonmoary method presumes that moary assets and liabilities are exposed. In contrast, the temporal method is designed to preserve the underlying theoretical basis of accounting measurement used in preparing the financial statements being translated. Which is best? We r