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  • Foreign Currency FS Translation

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    This document provides guidance on translating foreign currency financial statements. It discusses: 1) How to translate assets, liabilities, and equity at the closing or average exchange rate, with some items like accumulated depreciation and retained earnings requiring special treatment. 2) Financial reporting in hyperinflationary economies requires monetary assets and liabilities to not be restated, while non-monetary items are restated using the closing price index over the historical price index. 3) Retained earnings acts as a balancing figure in the translation and restatement process.

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    This document provides guidance on translating foreign currency financial statements. It discusses: 1) How to translate assets, liabilities, and equity at the closing or average exchange rate, with some items like accumulated depreciation and retained earnings requiring special treatment. 2) Financial reporting in hyperinflationary economies requires monetary assets and liabilities to not be restated, while non-monetary items are restated using the closing price index over the historical price index. 3) Retained earnings acts as a balancing figure in the translation and restatement process.

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    © All Rights Reserved
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    5 views2 pages

    Foreign Currency FS Translation

    Uploaded by

    guliramsam5
    This document provides guidance on translating foreign currency financial statements. It discusses: 1) How to translate assets, liabilities, and equity at the closing or average exchange rate, with some items like accumulated depreciation and retained earnings requiring special treatment. 2) Financial reporting in hyperinflationary economies requires monetary assets and liabilities to not be restated, while non-monetary items are restated using the closing price index over the historical price index. 3) Retained earnings acts as a balancing figure in the translation and restatement process.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    FOREIGN CURRENCY FS TRANSLATION

    ASSET:
    Cash
    Accounts Receivable
    Notes Receivable Closing Rate
    Land
    Building
    Less: Accumulated depreciation Not included, deduct it to the bldg. then
    multiply by rate

    LIABILITIES:
    Accounts Payable
    Unearned Rent Closing Rate
    Mortgage Payable

    CAPITAL
    Ordinary Shares Beginning/ Historical rate
    Share Premium
    Retained Earnings RE, beg xx  no rate
    Add: Income xx
    Less: Dividends (xx)  dividends declared
    RE, end xx
    Translation Gain Balancing Figure

    Income Statement
    Revenue Average rate
    Expenses

    Net Asset = Equity


    Common stock xx
    APIC xx
    RE xx
    Total Equity xx
    x closing rate x%
    Net Asset xx
    FOREIGN CURRENCY FS TRANSLATION

    FINANCIAL REPORTING IN HYPERINFLATION ECONOMIES

    ASSET
    Monetary Do not restate
    Non-monetary Restate
    LIABILITY
    Current Do not restate
    Non-current Restate

    Common Stock Restate


    Retained Earnings Balancing Figure

    Closing price index


    Restate Amount= Accountstitle amount x
    Historical price index

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