Foreign currency

Foreign currency accounting continues to be a topic of interest because of increased foreign exchange rate volatility and certain countries with high inflation and multiple exchange rates.

The basic foreign exchange guidance, now codified in ASC 830, was first issued back in 1981 as FAS 52. It provides a model for reporting when an entity conducts transactions in more than one currency. The entity prepares financial statements in a single currency, which requires that changes in the relationship between different units of currency be recognized and measured. ASC 830 uses two processes to express all of a reporting entity’s transactions in a single reporting currency: foreign currency measurement and foreign currency translation.

Foreign currency measurement is the process by which an entity expresses transactions whose terms are denominated in a foreign currency in its functional currency. Changes in functional currency amounts that result from the measurement process are called transaction gains or losses; transaction gains and losses are included in net income.

Foreign currency translation is the process of expressing a foreign entity’s functional currency financial statements in the reporting currency. Translation adjustments are included in the cumulative translation adjustment (CTA) account, which is a component of other comprehensive income.

Foreign currency volatility


Foreign currency volatility is impacting companies across all industries. PwC’s Valerie Wieman and John Horan discuss the driving forces, risk management hedging strategies, and disclosure considerations. View

In the loop: Greece's bailout - Financial reporting considerations


PwC examines the financial reporting implications of Greece's bailout package.

Financial statement presentation guide - 2014 second edition (updated June 2015)


PwC's popular Financial statement presentation guide addresses U.S. GAAP presentation and disclosure requirements of common balance sheet and income statement accounts.

Foreign currency volatility


Foreign currency volatility is impacting companies across all industries. PwC’s Valerie Wieman and John Horan discuss the driving forces, risk management hedging strategies, and disclosure considerations.

Foreign Currency Considerations in Acquisitions and Dispositions webcast - On demand (CPE-eligible)


In this recorded webcast, foreign currency professionals from PwC's National Office and the Capital Markets Accounting Advisory Services practice discuss key considerations for multinational companies with foreign operations regarding the impact that acquisitions and dispositions can have on functional currency determination, recording of goodwill, release of CTA and substantial liquidation of foreign entities. Watch a replay or participate in the on demand (CPE-eligible) version of this webcast.

In the loop: Financial reporting implications of foreign currency volatility - what can your company do?


PwC offers suggestions for how the financial statement impact of recent foreign currency volatility may affect disclosure.

In brief: Consolidation and disclosure related to Venezuelan operations


The SEC did not object to deconsolidation of a Venezuelan subsidiary due to currency restrictions and lack of control.

Foreign currency – 2014 accounting and financial reporting guide


Provides a framework and specific examples of how to account for foreign currency transactions and foreign operations.

Venezuela exchange rates


The reporting implications of three legal exchange mechanisms in Venezuela, each with a different exchange rate, are discussed by PwC's Stephanie Stewart, John Bishop and John Horan in a Special Edition of The quarter close.

Dataline: Implications of recent events in Venezuela - Multiple legal exchange rates exist as of March 31, 2014


At March 31, 2014, there were three legal exchange mechanisms administered by the Venezuelan government.

Determining functional currency


PwC's Stephanie Stewart, John Bishop, and Michael Yenchek discuss why determining functional currency is fundamental to a company's financial statements and tips for making the assessment.