Translation of Financial Statements, ASC 830

Foreign Currency Translation
SFAS 52, December 1981
“Foreign Currency Translation”

Translation of foreign currency financial statements
1. All items of financial statements are translated
–> from functional currency to reporting entity
–> using a current exchange rate

2. For assets and liabilities
–> current exchange rate at the balance sheet date

3. For revenue and expenses
–> current exchange rate at the time of recognition
–> or average rate during the period if appropriate

4. For stockholders’ equity
–> historical exchange rate at the time of transaction

Translation adjustments
1. Translation adjustments incur
–> when financial statements are translated
–> from functional currency to reporting currency

2. Translation adjustments are
–> reported in other comprehensive income

 

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