First, the current exchange rate method holds that all foreign currency accounts in foreign currency financial statements should be converted at the current exchange rate to reflect the current exchange rate level. This means not considering the change of historical exchange rate, but only considering the influence of current exchange rate. ?
Second, the current exchange rate method holds that all assets and liabilities accounts should be converted into local currency, and income and expenditure accounts should be converted into local currency. This method can more accurately reflect the exchange rate risks and benefits faced by the company. ?
Third, the current exchange rate method also puts forward some special conversion methods, such as long-term assets and long-term liabilities in foreign currency financial statements, which should be converted at the historical exchange rate instead of the current exchange rate.
Generally speaking, the current exchange rate method thinks that the current exchange rate can more accurately reflect the company's financial situation and exchange rate risk. However, there are some problems with this method. For example, in the market environment with frequent exchange rate fluctuations, using the current exchange rate for conversion may lead to instability of financial statements, thus affecting the decision-making of investors and corporate stakeholders. ?
I hope my answer is helpful to you!