23-Dec-2015 10:16

Currency translation methods for consolidating financial statements Mature grandmamas free date sex sites

EXECUTIVE SUMMARY Accounting for currency translation risks can be very complex.This article addresses only the basics and provides some tools to help the reader understand the issues and find resources.Globalization has changed the old accounting rule that debits equal credits.

The normal method of translating the financial statements of a foreign subsidiary is the closing rate/net investment method.

The balance sheet of a foreign operation is translated using the closing rate, being the exchange rate at the reporting date.

However it remains in place and can be used by entities not using FRS 23.

For listed entities and unlisted entities using fair value measures FRS 23 has replaced SSAP 20.

SSAP 20 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015.

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For more information visit: Individual transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date of the transaction.

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