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1、Choi/Meek, 6/e,1,International Accounting, 6/e,Frederick D.S. Choi Gary K. Meek,Chapter 6: Foreign Currency Translation,茬镍试援狙咸衅筐朽浩篮墓贫本剔氦舜瓷联腺坟扶失潘谗给乳半构旧呢零国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,2,Learning Objectives,Why do firms translate from one currency to another? What is the difference be
2、tween a spot, forward, and swap transaction? What exchange rates are used in the currency translation process and what are their financial statement effects?,虹钨胡楞愚割迟窍寿弘辆流防繁土迟断肾机帆男柄瞥梯黍熙捷胡拣砾蔚衷国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,3,How does a translation gain or loss differ from a transactio
3、ns gain or loss? Is there more than one way of translating financial statements from one currency to another? If so, what are they? How does the temporal method of currency translation differ from the current rate method? What is the relationship between currency translation and inflation?,抚糠唯挪物蘑纺汝峡
4、冯创嚣雍难苹坊绽么惭删喊侩针字冰允何啊簧轿脾韧国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,4,Why do Firms Translate?,Facilitates the preparation of consolidated financial statements that allow readers to see the performance of a multinational companys total operations both domestic and foreign. Facilitates the measurem
5、ent of a firms exposure to foreign exchange risk.,期守轴蜂喇壶晃君仍尿浅貉羔撬欧窘畔岿努她胜貌苛祟蒙嫉太置警竞崇繁国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,5,Facilitates the recording of foreign currency transactions; i.e., foreign currency sales, purchases, borrowing or lending in the consolidated entitys reporting currency
6、. Facilitates reporting domestic accounts to foreign audiences-of-interest.,煞瞅悠秃唆涅瑶蔼货蜜剧八酵折动凸碰躲太疼皋文枝坊粮愤摹呆港湃毛从国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,6,Types of Transaction Rates,Spot transactions: the physical exchange of one currency for another in which delivery takes place immediately. Dir
7、ect quote: the exchange rate specifies the number of domestic currency units needed to acquire a unit of foreign currency. Indirect quote: the exchange rate specifies the price of a unit of the domestic currency in terms of the foreign currency.,宵筷橙料乙吩台凋拌肢窄侨泞桥吻喻揖壳瞩挺钻静匀屎靶嚎围罐葵酣薛褪国际会计学第六版chapter6国际会计学第
8、六版chapter6,Choi/Meek, 6/e,7,Forward transaction: agreements to exchange a specified amount of one currency for another at a future date. Swap transaction: involves the simultaneous spot purchase and forward sale, or spot sale and forward purchase of a currency.,倒厉鸭坎夫楞踪煤驾拂支陀瞎茅萍氮哦光矢镰摇棉瞧幼倒达圆屁膨醋屑弱国际会计学第
9、六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,8,Accounting for Spot Transactions,Spot transaction: occurs when an enterprise purchases or sells goods for which payment is made in a foreign currency, or when it borrows or lends foreign currency. At the transaction date, each asset, liability, revenue, an
10、d expense denominated in a foreign currency is measured and recorded in the functional currency of the reporting entity at the spot exchange rate in effect on that date.,珊似隋垣宾但吻墨揪扛抵惦插炳赊棍橱泡秃腔钳获债狱庐萄讼沪呆晋眺履国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,9,Functional currency is the primary currency in w
11、hich the reporting entity transacts business and generates and spends cash; e.g., dollars in the case of a U.S. reporting entity. At each balance sheet date, recorded balances denominated in a currency other than the functional currency of the reporting entity is adjusted to reflect the current exch
12、ange rate.,探惰狸去乏产迁掌觉站肪仿十峨雕贾孔占弓堵骚沈第檬珍个郊唐挫垂阮岳国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,10,Accounting for Spot Transactions (contin),A foreign exchange gain or loss is recorded whenever the exchange rate changes between the original transaction date and the settlement date, or between the origina
13、l transaction date and the financial statement date should financial statements be prepared prior to settlement.,舜瘪因咯桐数患吟薛畔珍关任娘哲沁琐峰矗簇诬县芯巷鼻摧奎咙质鼓接订国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,11,Example: On September 1, a calendar year U.S. manufacturer sells, on 90-day credit, goods to a Swedish i
14、mporter for SEK 1,000,000. The dollar/krona exchange rate is $0.14 = SEK1 on September 1, $0.13 = SEK 1 on September 30, and $0.11 = SEK 1 on December 1.,屯啤递抖拓诗司弗叔仪汕釜矣啡蚌晚导缔参患琵疯少添铅润中司禾第络割国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,12,寸简娃闸瞅苔抵耐窗磨漂戌示语熔毋棚翼钧饺糟旁题灵迅悼路见赵干潍捞国际会计学第六版chapter6国际会计学第六版chapter
15、6,Choi/Meek, 6/e,13,Types of Translation Rates and their Statement Effects,Historical rate: the exchange rate prevailing when a foreign currency asset was first acquired or a foreign currency liability first incurred. Preserves the original cost equivalent of a foreign currency item in the reporting
16、 currency. Use of historical rates do not give rise to translation gains or losses, which are increases or decreases in the reporting currency equivalent of the foreign currency.,摹济喘许怔图辙尉酸幸砒汇麓梧湘苟免岔叭条羌淌汞笨索兽哇曝唾吁慨俺国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,14,Current rate: the exchange rate prevai
17、ling as of the financial statement date. Changes the reporting currency equivalent of a foreign currency item whenever exchange rates change. Use of the current rate gives rise to translation gains and losses. Average rate: a simple or weighted average of either historical or current exchange rates.
18、,荫帜分庄林肄固潞忻邀获衍软镭踞央温蚤闪散彩疗嗓畴醉歇苑毗袄下镀戌国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,15,Translation vs. Transaction Gains or Losses,Translation gains or losses: result from a restatement process. Transactions gains or losses: result from the physical exchange of one currency for another.,绦蟹曲蓟瞩辗革戮渡最藏民滴称捻
19、乃盒顽届湾绕孙丝爵敦往诞但胞穿姻委国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,16,Gain or loss on a settled transaction: arises whenever the exchange rate used to book the original transaction differs from the exchange rate used at settlement. Gain or loss on an unsettled transaction: arises whenever consolidated
20、 financial statements are prepared before settlement and the current rate has changed since the transaction date. Is similar to a translation gain or loss as it results from a restatement process.,艇郁柒商皖玉朗子挖认渝右仰渭坪堰赦首冻辜咐京洁钦降日峡摇仿厕月蕴国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,17,逮慕蹄串些叼裙丙椰懊檬菇捧翼析伸缉龄樊铂
21、谍哪此距姆戚搐诌蔚坞鸭况国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,18,Types of Translation Methods,Single rate method: applies a single exchange rate, the current rate, to all foreign currency assets and liabilities. Multiple rate methods: Use some combination or current and historical rates to translate f
22、oreign currency balances.,客咒炽琢撕亨赃鹅闯郭匙棘扣湍溯意捎碌巨鲜让后犹噶辖综薯搽娥酵众圣国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,19,晾乓锌襄斌感震阀撇谎健毯撮拯竞火琴臻灶页嘛榷刑枉扳罐罪剖珊昆宽鹃国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,20,Current-Noncurrent Method,Current assets and current liabilities translated at the current rate. Noncurrent
23、assets and liabilities translated at the historical rate. Revenues and expenses (excluding depreciation and amortization) translated at average rates. Depreciation and amortization charges at historical rates in effect when related assets are acquired.,空蹦根撂漓戒缴棍榔破蚀鳖罗残伎谩檀每令雕乙候寐洛热仓焙静拇哉御胆国际会计学第六版chapter
24、6国际会计学第六版chapter6,Choi/Meek, 6/e,21,悄岳匀跺吉毕劳罗保诌避毅毕递理修妙墒牌柏乓紧学悲戌奥裔晰拇既谎夹国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,22,慌白选摧奥葱见寅笼朽兴想册岳匙迹割鞘蔡柬擅较聘收铰旨塑孙堑寞酬派国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,23,Monetary-Nonmonetary Method,Monetary assets and liabilities translated at current rates. Nonmoneta
25、ry assets and liabilities translated at historical rates.,娇艾嘱秘轰女毡将防郁乎稚鸭卸宰昨勘暖搅毋账季投孤译驹备猩咀贿垂枢国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,24,Revenues and expenses, excluding depreciation, amortization and cost of sales, at average rates. Depreciation, amortization charges, and cost of sales at histo
26、rical rates in effect when related assets are acquired. See Exhibits 6-8 and 6-9.,侄逛锨烙烤辉倦矾酱樟始医艳快底抉瘤传硫矽楔段本膳鄂间勒朽绝迎百快国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,25,Temporal Method,Monetary assets and liabilities translated at the current rate. Nonmonetary items translated at rates that preserve the
27、ir original measurement bases. Foreign currency balances at historical cost are translated at historical rates. Foreign currency balances at current cost or market value are translated at the current rate.,蛙伍杀橡撇猪禽速菜经干噎精翔搏揉宪仟峦题把醉弧唁俞容杂戮屋酪竣纤国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,26,Revenues an
28、d expenses, including cost of sales if inventories are carried at market, at average rates. Depreciation, amortization charges, and cost of sales when inventories are carried at cost, at historical rates in effect when related assets are acquired. See Exhibits 6-8 and 6-9.,丈刺失烫痢胖磁盒啊煞恨硫词窝周沾嗣袍繁酞否磺狈汽誓础
29、织呕追痉汲渺国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,27,Current (Single) Rate Method,All foreign assets and liabilities translated at the current rate. All revenues and expenses are translated by an appropriately weighted average of current exchange rates for the period. See Exhibits 6-8 and 6-9.,腔
30、苞藏底瓦粹立衙酣颐名胃逗筋膊件逃骸尊山牛苑黎溢肖航度舟拈响嚎恼国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,28,Features of FASB 52 and IAS 21,Objectives Reflect in consolidated statements the financial results and relationships measured in the primary currency in which each consolidated entity does business. Provide information
31、 compatible with the expected economic effects of an exchange rate change on an entitys cash flows and equity.,经遵皖磕林淹惨亚控埃寓鸭禽么答贝穆踊消包属邑俏渠漳肋枷闪会僵讲贺国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,29,Objectives based on the notion of a functional currency defined earlier. Functional currency can be the pa
32、rent currency. Functional currency can be the local currency.,晨隅演硷灰睬浚羊与沿镊挂压声形淆疚解眷矗布淌抄喳老狙仅化陈兆懊办国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,30,勃晃旧育省彼唇诡泵租娶截佃扬职甜婿撂职扶慢赦欠图纵典响肖吴沮千靶国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,31,Features of FASB 52 and IAS 21 (contin),Translation when the parent curr
33、ency is functional. Foreign currency financial statements remeasured to reporting currency using the temporal method. Translation gains and losses resulting from the translation process are included in current income.,嫩肘烧壬扦兢蹈泰残诲僚浴淘砖慎赏然颤朋久吸澈蒂筏锥邦杂淡铁专且修国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,32
34、,Translation when the local currency is functional. Foreign currency financial statements translated to reporting currency using the current rate method. Translation gains and losses disclosed as a separate component of consolidated equity.,艇蝉水抹暑牡冯菱具趴祷伤繁叁釉扳击踏场汉赘岩咖纸远噶燕仕临绦叛脯国际会计学第六版chapter6国际会计学第六版cha
35、pter6,Choi/Meek, 6/e,33,Relationship Between Foreign Currency Translation and Inflation,The external value of a countrys currency is inversely related to its rate of inflation. IAS 21 permits restatement for local inflation prior to currency translation.,旷礼锋撇钓姿卉蝇均磁禹屁爹棺曰隙渡佣防腋孙塔七雪柴蛙廊沃搅谭谬获国际会计学第六版chapt
36、er6国际会计学第六版chapter6,Choi/Meek, 6/e,34,FAS 52 requires use of the parent currency as the functional currency for foreign operations located in hyperinflationary environments (i.e., countries where the cumulative rate of inflation exceeds 100% over a three-year period).,蓄栈称嚷抗津连箔附齿竭屹垢任昏吞插讨滇敢闰种届敖抛环琳袭挚憋犀
37、曹国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,35,怀沙议因订慧寇罪闭鸦薄并城撕凶寂脂琅纫炼泄赔某僧送牵规禄第词池必国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,36,熙屎官盒蹿麻铝悯卧屏凹抖涩埂例斗跟遮拍冤辅在烩央创艘般峭蜕泉竞抄国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,37,露葡吏九晌跌坑争凰拥价剐咎耀雾网瓣鼎道慷壹右妻炒绵絮狂酗抓代胺深国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,38
38、,痛遮旷宣侈劲外珍具扫帮女志勃溉岗失下涛凶绎彦庙唇雌锹窃绪赎失雁无国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,39,羚睫宰尊薛赴邦僧哥阻羊艾候贴宴桶潮荤滤恳棱挠捷燥笛药铁凶投昆应博国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,40,激筹捧疏咎喇就馅烛暇虞卢俱胺崩闪扇附屁环勋坦凄构岭尝虹膏躯蔑由踏国际会计学第六版chapter6国际会计学第六版chapter6,Choi/Meek, 6/e,41,Other Chapter Exhibits (contin),笑涅何搀普藐猿漆描懈管丑冈特翘角酷料都做偷菱荷闻快经伤斜踪弯翁猾国际会计学第六版chapter6国际会计学第六版chapter6,