Blackwell Reference Online

Extract

Accounting regulations for foreign currency vary internationally. Foreign currency accounting regulations are contained in Statement of Financial Accounting Standard No. 52, “Foreign Currency Translation” (1981) (SFAS 52) in the USA; Statement of Standard Accounting Practice No. 20 (SSAP 20) in the UK; CICA 1650, “Foreign Currency Translation,” in Canada; AASB 1012 and AAS 20, “Foreign Currency Translation” in Australia; International Accounting Standard IAS 21, “The Effects of Changes in Foreign Exchange Rates”; standards issued by the Business Accounting Deliberation Council in Japan; recommendations issued by Sweden's Authorized Accountant Association; the Plan Comptable Général in France, and other forms of regulation in various countries. Not all countries' regulations regulate all foreign currency accounting issues; nor do all countries' regulations concur. It is noteworthy that the European Community's (EC) Fourth and Seventh Directives are both silent concerning foreign currency accounting, requiring merely the disclosure of exchange rates used to translate foreign currency balances. To incorporate a firm's equity investment in operations with foreign‐currency denominated accounts into the firm's own group accounts, it is necessary to translate the foreign operation's accounts into the investor's reporting currency. Of the following translation methods the current rate and ... log in or subscribe to read full text