The Closing-Rate Method, also known as the Net-Investment Method, involves restating balance sheet figures into another currency using the closing rate of exchange for all assets and liabilities as of the balance-sheet date.
The net-investment method, often used in international accounting, is a technique applied to translate a foreign subsidiary's financial statements into the parent company's currency. This method helps in adjusting for fluctuating exchange rates and provides a consistent basis for valuation of the subsidiary’s net assets.
