Worldwide Financial Procedures

FOREIGN CURRENCY TRANSLATION

WW-230B
Approved by:
Effective:

S. J. Cosgrove
December 2014

Section

Index

Page

Section I:

Introduction
A. Executive Summary
B. References
C. Definitions

Section II

Functional Currency Concept

A. Cash Flow Indicators
B. Sales Price Indicators
C. Sales Market Indicators
D. Expense Indicators
E. Financial Indicators

Section III

Translation of Foreign Currency Statements

A. Translation When the Local Currency is the Functional Currency
B. Translation When a Foreign Currency is the Functional Currency
C. Summary of Translation Procedures

Section IV

Cumulative Translation Adjustment (CTA) Account

12

Section V

Translation of Foreign Operations in Highly Inflationary Economies 13

Section VI

Deferred Taxes

14

Section I - Introduction

A. Executive Summary
This procedure provides general guidelines under U.S. Generally Accepted Accounting
Principles (US GAAP) for translation of foreign currency financial statements that are
included by consolidation, combination, or the equity method in a parent companys financial
statements. This procedure applies to J&J Corporate as well as to Affiliates that consolidate
the financial statements of other Affiliates before reporting to J&J Corporate (subconsolidations).
The financial statements of J&J Affiliates, which may exist and operate in different economic
and currency environments, are consolidated and presented as though they are the financial
statements of a single enterprise. Because it is not possible to combine, add, or subtract
measurements expressed in different currencies, it is necessary to translate into a single
reporting currency those assets, liabilities, revenues, expenses, gains, and losses that are
measured or denominated in a foreign currency.
The unity presented by such translation does not alter the underlying significance of the
results and relationships of the constituent parts of the enterprise. It is only through the
effective operation of its constituent parts that the enterprise as a whole is able to achieve its
purpose. Accordingly, the translation of the financial statements of each component entity of
an enterprise should accomplish the following objectives:
1. Provide information that is generally compatible with the expected economic effects of a
rate change on an enterprise's cash flows and equity and
2. Reflect in consolidated statements the financial results and relationships as measured in
the primary currency in which each entity conducts its business.
Please also refer to WW 230A, Exposure Management and Hedge Accounting Policy, for
foreign currency concepts as it relates to hedging.

B. References
(ASC 830) FAS 52, Foreign Currency Translation
(ASC 830-10-45-15) EITF 92-4: Accounting for a Change in Functional Currency When an
Economy Ceases to Be Considered Highly Inflationary
2005 Miller GAAP Guide

C. Definitions
1. Local Currency: The currency of the country in which the Management Reporting
Company (MRC) is located. This is also the currency of the legal entity (or entities).The
local currency of the legal entity is documented in the BRAVO website.
2. Functional Currency: The currency of the primary economic environment in which the
MRC operates. Assets, liabilities, and operations of an MRC must be expressed in the
functional currency of the MRC. In most cases, the functional currency of an Affiliate is
WWP-230B Foreign Currency Translation

the currency of the country in which the Affiliate generates and expends cash, that is, its
local currency. The functional currency of the MRC is documented in the BRAVO
website.
3. Reporting Currency: The currency in which the corporation prepares its financial
statements. It is normally the currency of the country in which the corporation is
domiciled; that is, US dollars for Johnson & Johnson.
4. Highly Inflationary Economy: A highly inflationary economy is defined as an economy
that has cumulative inflation of approximately 100 percent or more during the past three
years. Affiliates located in a highly inflationary economy should use the U.S. dollar as
their functional currency. Corporate Consolidations group performs the analysis of
highly inflationary economies annually.
5. Foreign Currency Translation: The restatement of accounts in one currency into another
currency. The translation may be of a set of financial statements, prepared in a local
currency, of a foreign Affiliate, which has to be consolidated with the statements,
prepared in the parents currency, of a parent company.
6. Translation Adjustments: Translation adjustments result from the process of translating
financial statements from the Affiliate's functional currency into the currency in which J&J
or the parent Affiliate prepares its financial statements.
7. Foreign Currency Transactions: Transactions whose terms are denominated in a
currency other than the MRC's functional currency. Foreign currency transactions arise
when an enterprise buys or sells on credit goods, services or assets whose prices are
denominated in foreign currency, or borrows or lends funds and the amounts payable or
receivable are denominated in foreign currency,
8. Transaction Gain or Loss: Transaction gains or losses result from a change in rates
between the functional currency and the currency in which a foreign currency transaction
is denominated. They represent an increase or decrease in (a) the actual functional
currency cash flows realized upon settlement of foreign currency transactions and (b)
the expected functional currency cash flows on unsettled foreign currency transactions.
9. Remeasurement: The process of translating the accounts of an Affiliate into its functional
currency when the books and records are maintained in another currency. It uses the
monetary/nonmonetary method under which historical exchange rates are used for
nonmonetary items and current exchange rates are used for monetary items.
10. Income Statement Rate (P&L Rate): It is the average rate of exchange during the
period. It is also known as a P&L rate. BRAVO submissions are on a year-to date basis,
therefore, the year-to-date exchange rates are to be used for BRAVO submission
purposes. Year-to-date P&L rates are available on the Worldwide Procedures website.
11. Balance Sheet Rate (B/S Rate): It is the exchange rate at the balance sheet date.
Balance Sheet rates are published via the Worldwide Procedures website.
Section II Functional Currency Concept
WWP-230B Foreign Currency Translation

The functional currency of an MRC is the currency of the primary economic environment in
which the MRC operates. In most cases, the functional currency of an Affiliate is the currency of
the country in which the Affiliate generates and expends cash, that is, its local currency. For the
Affiliates that have operations in different countries, the functional currency is to be determined
based on the primary economic environment in which the Affiliates operate.
The following guidelines based on certain indicators, should be considered in determining the
functional currency of an Affiliate:
A.

Cash Flow Indicators: If the Affiliates cash flows are mostly in its local currency,
the functional currency is the local currency. If the Affiliates cash flows are mostly in
another currency, then that other currency is the functional currency.

B.

Sales Price Indicators: If the Affiliates sales prices for its products are primarily
determined (on a short-term basis) by local competition or local government regulations, and
not by exchange rate changes, the functional currency is the local currency. If the Affiliates
sales prices for its products are mostly responsive (on a short-term basis) to exchange rate
changes, such as worldwide competition and prices, the functional currency is the parent
companys currency.

C.

Sales Market Indicators: If the Affiliate has an active local sales market for its
products, although there also may be significant amounts of exports, the functional currency
is the local currency. If the Affiliates sales market is mostly in another country, or sales
contracts are mostly made in another countrys currency, the functional currency is the other
countrys currency.

D.

Expense Indicators: If the Affiliates costs of production or service are mostly

local costs, although there also may be imports, the functional currency is the local currency.
If the Affiliates costs of production or service, on a continuing basis, are primarily costs for
components obtained from another country, the functional currency is the other countrys
currency.

E.

Financing Indicators: If the financing for the Affiliate is in local currency, and
funds generated by the Affiliate are sufficient to service debt obligations, the functional
currency is the local currency. If the financing for the Affiliate is provided by the parent
company or is obtained in U.S. dollars and funds generated by the Affiliate are insufficient to
service its debt, the functional currency is the parent companys currency.

Should there be a mix of indicators, all the relevant facts and circumstances need to be carefully
analyzed. The approval from Assistant Corporate Controller - Financial Compliance and
Procedures, Assistant Corporate Controller - Corporate Consolidations, Director Tax Systems
and Planning and Assistant Treasurer Treasury Services is required for the situations where
the functional currency is different from the local currency. Changing functional currency from
the local currency to a different currency also requires the approval from these departments.
Once the functional currency for an MRC is determined, the determination should be used
consistently unless significant changes in economic facts and circumstances indicate clearly
that the functional currency has changed. For US public financial reporting purposes, previously
issued financial statements should not be restated for any changes in the functional currency.
For J&J internal management reporting purposes, previously submitted financial information
WWP-230B Foreign Currency Translation

would be automatically restated by BRAVO Financial Reporting System for any changes in the
functional currency for the life of the Affiliate.

Section III Translation of Foreign Currency Statements

Foreign currency financial statements must be in conformity with US GAAP before they are
translated into the functional currency of the reporting MRC. The following are procedures that
should be performed in translating local functional currency financial statements. The
translation procedures vary depending on the functional currency: A: when local currency is the
functional currency; B. when a foreign currency is the functional currency. Please note that
there is no P&L impact in situation A, but there is P&L impact in situation B.
A. Translation When the Local Currency is the Functional Currency (e.g. a Swiss Affiliate
maintains its books and records in Swiss francs and reports its financial statements in Swiss
Francs to Corporate via Bravo. The process below describes the translation process at
Corporate. In the same example, if the Swiss Affiliate reports its financial statements to
another Affiliate which has Euro as its functional currency and the Euro Affiliate subconsolidates the Swiss Affiliate before it reports to Corporate via Bravo in Euro, then the
process below describes the translation process at the Euro Affiliate.)
1. All foreign MRC's assets and liabilities are translated using the current exchange rate at
the balance sheet date. Revenues, expenses, gains, and losses are translated using
the current P&L rates. Equity accounts (e.g., common shares issued) are translated at
historical exchange rates (i.e., the exchange rates in effect when the transactions
occurred). Retained earnings, except for Equity Clearing Accounts 361000 and 362000,
are translated at the weighted average of the historical rates in effect when the income
was earned. Equity Clearing Accounts 361000 and 362000 are translated at the year-todate P&L rates. Beginning balance + progression accounts. Current Balance Sheet and
Year to date P&L rates are published via the Worldwide Procedures website. Weighted
average historical rates for equity accounts and retained earnings are to be calculated
by fixing the beginning balance at the prior year-end amount and using the P&L rate for
the current year changes.
2. The translation of foreign currency financial statements to the functional currency of the
reporting MRC does not produce realized exchange gains or losses. Instead, the gains
or losses resulting from the exchange rate movements in translation are considered
unrealized and to be recorded directly as a separate component of other comprehensive
income (OCI) in shareholders' equity. This adjustment ordinarily is recorded in a
cumulative translation adjustment (CTA) account. Refer to section IV for more details.
These procedures are explained below using a Swiss Affiliate that maintains its books and
records in Swiss francs. The example describes the translation process into US Dollars.
The Swiss franc financial statements of the Affiliate are:

WWP-230B Foreign Currency Translation

Swiss Franc Financial Statements

Cash
Net Plant
Total Assets
Common Stock
Retained Earnings
Total Liabilities and Equity

Jan 1, 20X1
(SFr)
10,000
10,000
20,000

Dec 31, 20X1

(SFr)
13,000
9,000
22,000

10,000
10,000
20,000

10,000
12,000
22,000
20X1
3,000
(1,000)
2,000 a

Gross Profit
Depreciation
Net Income
Retained Earnings, beginning of year
Net Income 20X1
Retained Earnings, end of year

10,000
2,000 a
12,000
a. cross reference each other

The following exchange rates are assumed:

Weighted average historical rate for equity accounts is Swiss franc (SFr) 1 = $0.65.
(Beginning balance of equity accounts in US Dollar (US$) remains the same as prior
year-end balance of US$6,500. Since no new stock has been issued in 20X1, the
ending balance for 20X1 is also US$6,500.)

Weighted average historical rate for retained earnings at the beginning of the year is
Swiss franc (SFr) 1 = $0.70. (Beginning balance of retained earnings in US Dollar
(US$) remains the same as prior year-end balance of US$7,000.)

Year-end rate for current year is SFr 1 = $0.90.

Weighted average rate for the year of SFr 1 = $0.80.

Assuming that the historical and average rate for all prior years' transactions did not
fluctuate, so there is no opening balance in the translation adjustments account.

WWP-230B Foreign Currency Translation

Method of Translation
(Local Currency is Functional Currency)
End of year 20X1
End of Year
(SFr)

Rate End of year

(Dollars)

Cash
Net Plant
Total Assets

13,000
9,000
22,000

0.90
0.90

11,700
8,100
19,800

Common Stock
Retained Earnings
Cumulative Translation Adjustments
Total Liabilities and Equity

10,000
12,000

0.65

22,000

6,500
8,600 b
4,700 d
19,800

20X1
3,000
(1,000)
2,000

20X1
2,400
(800)
1,600 c

Gross Profit
Depreciation
Net Income
Retained Earnings, beginning of year
Net Income 20X1
Retained Earnings, end of year

10,000
2,000
12,000

0.80
0.80

0.70
0.80

7,000
1,600 c
8,600 b

Analysis of Cumulative Translation Adjustment (CTA)

During the year of 20X1
Beginning of Year
Rate End of year
(SFr)
(Dollars)
10,000 E-B=0.25
2,500
10,000 E-R=0.20
2,000
2,000 E-A=0.10
200
22,000
4,700 d

Common Stock
Retained Earnings
Net Income for the year

B - Beginning common stock exchange rate

R - Beginning retained earnings exchange rate
A - Average exchange rate for the year
E - Ending exchange rate
WWP-230B Foreign Currency Translation

0.65
0.70
0.80
0.90

Note: lower case letters cross reference each other

7

B. Translation When a Foreign Currency is the Functional Currency

There may be instances where an MRC does not maintain its books and records in its
functional currency. For instance, if the Swiss Affiliate conducts most of its business
activities in Euro, management may conclude that the Euro is the functional currency of that
MRC, despite the fact that its records are maintained in Swiss francs.
When an MRC's records are not expressed in its functional currency, its financial statements
must be remeasured into that currency before they are translated into the reporting currency.
Remeasurement should provide results comparable to those that would have occurred had
the MRC used its functional currency to maintain its records.
Two categories of exchange rates are used in remeasuring financial statements. Historical
exchange rates are those that existed at the time of the transaction, the current exchange
rate is the rate that is current at the date of remeasurement.
Monetary assets and liabilities are those that are fixed in amount such as cash, account
receivable, and most liabilities. Monetary assets and liabilities are translated at the current
rate of exchange. All other assets, liabilities, and stockholders equity are translated using
foreign currency exchange rates based on the following:
1. Accounts based on past purchase exchanges (historical or acquisition cost) are
remeasured at historical exchange rates.1
2. Accounts based on current purchase, current sale, and future exchanges are
remeasured at the current exchange rate.1
Revenue and expense transactions are remeasured at the average exchange rate for the
period, except those expenses related to assets and liabilities, which are remeasured at
historical exchange rates. For example, deferred income, depreciation and amortization are
remeasured at historical exchange rates, the rate that existed at the time the underlying
related asset was acquired.
The following is a list of assets, liabilities and stockholders equity items and their
corresponding remeasurement rates:

Past purchase exchange the historical or acquisition cost, because it is based on the actual past
purchase price
Current purchase exchange the replacement cost, because it is measured by the current
purchase price of a similar resource
Current sale exchange the market price, because it is based on the current selling price of the
resource
Future exchange the present value of future net money receipts, discounted cash flow, or the
discounted net realizable value, because it is based on a future resource

WWP-230B Foreign Currency Translation

Current
Rate
X

Cash and Cash Equivalents

Marketable securities at cost

Historical
Rate
X

Marketable securities at market

Accounts and notes receivable
Reserve for Doubtful Accounts
Sales and Marketing related Reserve
Inventories at cost
Inventories at market, net realizable value,
selling price
Prepaid expenses
Refundable deposits
Intercompany receivable or payable
Fixed assets and accumulated depreciation
Intangible assets and accumulated
amortization
All short-term and long-term liabilities
Deferred income
Dividends and Withholding Taxes Payable
Common Stock

X
X
X
X
X
X
X
X
X
X
X
X
X
X
X

Additional Capital

Retained Earnings

Equity Clearing accounts 361000 and 362000

Treasury Stock

X
X

Minority interests
Other Comprehensive Income

X
X

Sources
B/S Rate
B/S and P&L Rates
(See note1)
B/S Rate
B/S Rate
B/S Rate
B/S Rate
P&L Rate
B/S Rate
P&L Rate
B/S Rate
B/S Rate
B/S and P&L Rates
(See note1)
B/S and P&L Rates
(See note1)
B/S Rate
P&L Rate
B/S Rate
B/S and P&L Rates
(See note1)
B/S and P&L Rates
(See note1)
B/S and P&L Rates
(See note1)
P/L Rates
B/S and P&L Rates
(See note1)
P/L Rates
B/S and P&L Rates
(See note1)

The beginning balance is the translated prior year ending balance. The current year changes
are booked using current year P&L rates.
1

WWP-230B Foreign Currency Translation

In the example, the records of the Swiss Affiliate would first be remeasured into Euro and then
translated into U.S. dollars using the method described in Section III.A.

Swiss Franc Financial Statements

Cash
Net Plant
Total Assets

Jan 1, 20X1
(SFr)
10,000
10,000
20,000

Dec 31, 20X1

(SFr)
13,000
9,000
22,000

10,000
10,000
20,000

10,000
12,000
22,000

Common Stock
Retained Earnings
Total Liabilities and Equity

20X1
3,000
(1,000)
2,000 a

Gross Profit
Depreciation
Net Income
Retained Earnings, beginning of year
Net Income 20X1
Retained Earnings, end of year

The following exchange rates are assumed:

10,000
2,000 a
12,000
a. cross-reference each other

Historical weighted average rate for Retained Earnings is Swiss franc (SFr) 1 = Euro
1.45 and Euro 1 = USD$1.20. (Beginning balances of Retained Earnings in Euro
and in US Dollar remain the same as prior year-end balances of Euro14,500 and
USD$17,400.)

Historical weighted average rate for Equity Accounts is Swiss franc (SFr) 1 = Euro
1.1 and Euro = USD $0.80. (Beginning balances of Equity Accounts in Euro and in
US Dollar remain the same as prior year-end balances of Euro11,000 and US$8,800.
Since no new stock has been issued in 20X1, the ending balances for 20X1 are also
the same as the beginning balances.)

Year-end rate for current year are SFr 1 = Euro 1.55 and Euro 1 = USD $1.30

Weighted average rate for the year are SFr 1 = Euro 1.50 and Euro 1 = $1.25

Assuming that the historical and average rate for all prior years' transactions did not
fluctuate, so there is no opening balance in the translation adjustments account.

WWP-230B Foreign Currency Translation

10

Remeasurement and Translation

(Third Currency is Functional Currency)
Year 20X1
Remeasurement
End of Year
Rate End of Year
(SFr)
(Euro)

Translation
Rate
End of Year
(Dollars)

Cash
Net Plant
Total Assets

13,000
9,000
22,000

1.55
1.45

20,150
13,050
33,200

1.30
1.30

26,195
16,965
43,160

Common Stock
Retained Earnings
Cumulative Translation Adjustments
Total Liabilities and Equity

10,000
12,000

1.10

11,000
22,200 a

0.80

8,800
27,025 f
7,335 g
43,160

1.25
1.25
1.25

5,625
(1,813)
5,813
9,625

1.20
1.25

17,400
9,625
27,025 f

22,000
20X1
3,000
(1,000)

Gross Profit
Depreciation
Foreign Exchange Gain
Net Income

33,200

1.50
1.45

2,000

Retained Earnings, beginning of year

Net Income 20X1
Retained Earnings, end of year

10,000
2,000
12,000

1.45
1.50

20X1
4,500
(1,450)
4,650 c
7,700 b
14,500
7,700 b
22,200 a

The foreign exchange gain of Euro 4,650 results from remeasurement from Swiss frances to Euro and must be
included in income. It is calculated as follows:
Opening net monetary assets (cash)
Change in exchange rate during the year (1.55-1.10)

Sfr
x
Euro

10,000
0.45
4,500 d

The effect of translating gross profit at average rate and increase in net monetary assets at year-end rate:
Gross profit (increase in cash)
Change in exchange rate (1.55-1.50)

Sfr
x
Euro

Total foreign exchange gain

3,000
0.05
150 e
4,650 c=d+e

Analysis of Cumulative Translation Adjustment

During the year of 20X1

Common Stock
Retained Earnings
Net Income for the year

Beginning of Year
Rate End of year
(Euro)
(Dollars)
11,000 E-B=0.50
5,500
14,500 E-R=0.10
1,450
7,700 E-A=0.05
385
33,200
7,335 g

WWP-230B Foreign Currency Translation

B - Beginning common stock exchange rate

R - Beginning retained earnings exchange rate
A - Average exchange rate for the year
E - Ending exchange rate

11

0.80
1.20
1.25
1.30
Note: lower case letters cross reference each other

C. Summary of Translation Procedures:

Currency in
Which the Books
and Records Are
Maintained

Functional
Currency

Translation Method
for Local Affiliates

Translation Method for

Corporate or Affiliates that
perform Sub Consolidation

Local currency

Local currency

No translation
required

(e.g. Swiss Franc)

(e.g. Swiss Franc)

Translating the functional

currency to the reporting
currency

(e.g. report in Swiss

Franc)

Local currency
(e.g. Swiss Franc)

Third Currency
(Non local or
reporting
currency)

Remeasurement
from local currency
to functional
currency

(e.g. Euro)

(e.g. remeasure from

Swiss Franc to Euro,
Refer to Section III. B)

(e.g. translate Swiss Franc to USD,

Refer to Section III. A)

Translating the functional

currency to the reporting
currency
(e.g. translate from Euro to USD,

Local currency

Reporting
currency

(e.g. Swiss Franc)

Remeasurement to
the reporting
currency

Refer to Section III. B)

No translation required

USD
(e.g. remeasure from
Swiss Franc to USD,
Refer to the steps in
Section III. B)

Reporting currency

Reporting
currency

No translation
required

No translation required

USD
USD

Section IV Cumulative Translation Adjustment (CTA) Account

The translation of foreign currency financial statements from the functional currency of the
reporting MRC to USD does not produce realized exchange gains or losses. Instead, the gains
or losses are considered unrealized and are to be recorded in Cumulative Translation
Adjustment (CTA) accounts under other comprehensive income as a component of
stockholders equity.

WWP-230B Foreign Currency Translation

12

BRAVO account 351000 series, Foreign Currency Translation EB are not to be used by
the affiliates. The following accounts are BRAVO system accounts to which the currency
translation adjustments resulted from the process of translating financial statements from
an affiliates functional currency into the US dollar are calculated and posted by BRAVO.
351100Common Stock CTA
351200
Additional Capital CTA
351300
Retained Earnings CTA
351400
OCI CTA
Account 351900 Other CTA is restricted to be used by Corporate Consolidations.

BRAVO Account 372001 Currency Gain/Loss on Translation should be used by the

Affiliates who perform sub-consolidations to record CTA, where it is appropriate as
described above under Section III(B). The consolidation and reporting of various legal
entities with different Local Currencies under one MRC is generally not considered a
sub-consolidation.
An example where the use of the CTA during sub-consolidation is appropriate is where
non-US affiliates are translating financial statements into USD prior to BRAVO
submission, except where a country has been designated as hyperinflationary.
Affiliates that are looking to record balances to this account, other than for purposes
specifically outlined in WWP310B: WW Dividend Policy, are strongly encouraged to
contact the Financial Compliance and Procedures Group to ensure the appropriate
usage of this account prior to recording balances.

Special accounting rules apply to CTA in case Affiliates are liquidated or divested.
Please contact the Financial Compliance and Procedures Group at Corporate in such
case.

Affiliates are not allowed to hedge CTA.

Section V Translation of Foreign Operations in Highly Inflationary Economies

A highly inflationary economy is one in which the cumulative inflation over a three-year
consecutive period is in excess of 100%. Once a country is deemed to be in a highly
inflationary economy, all Affiliates in the country are to use the U.S. dollar as the functional
currency. Thus, the financial statements of a foreign MRC in a highly inflationary economy are
remeasured into the USD, following the steps described in Section III.B. Gain or loss on
remeasurement is recognized in current net income. Any CTA account existing at the date an
economy becomes highly inflationary is not reversed but frozen. Only Affiliates notified by the
Corporate Consolidations Department should report results as Affiliates in Highly Inflationary
Economies and follow this section of the procedure.
Upon a change in Functional Currency, e.g. due to a change in status from a highly to a nonhighly inflationary economy status, the Affiliate should restate the functional currency accounting
WWP-230B Foreign Currency Translation

13

bases of nonmonetary assets and liabilities at the date of change in functional currency from
U.S. dollar to the local currency as follows:

A. The reporting currency amounts at the date of change should be translated into the local
currency at current exchange rate, and

B. Those local currency amounts should become the new functional currency accounting
bases for the non-monetary assets and liabilities.

C. No adjustment of the CTA balance should be made for the period during which the
economy was highly inflationary.
Affiliates may need to reassess their hedging strategies and business practices. For instance, if
the local currency becomes the functional currency, U.S. dollar transactions would be
considered foreign-denominated transactions. Since the U.S. dollar is no longer their functional
currency, exchange gains and losses on U.S. dollar transactions would be included in income.
Section VI Deferred Taxes
Deferred taxes are not recognized at Johnson & Johnson for translation-related differences of
(a.) international joint ventures as their undistributed earnings are essentially permanent in
duration and (b.) international Affiliates as they are deemed as permanent investments of
Johnson & Johnson.

DOCUMENT OF CHANGE SUMMARY

June 2009

To clarify BRAVO account 351000 series are restricted to be used by

Corporate Consolidations. Account 372001 is to be used by affiliates that
perform sub-consolidations.

July 2009

Reflected FASB codification in reference section.

Dec 2014

Revised to update language regarding the uses of the 372001. (Section IV).
Also included minor revisions to the definitions of local and functional
currency.

WWP-230B Foreign Currency Translation

14