# ASC 830-20-25: Foreign Currency Matters — Foreign Currency Transactions — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/830/20/#25-recognition)

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## ASC 830-20-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/830/20/#25-recognition)

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##### [830-20-25-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-25-1)

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At the date a [foreign currency transaction](https://asc.understandingaccounting.org/glossary/f/#foreign-currency-transactions "Transactions whose terms are denominated in a currency other than the entity's functional currency. Foreign currency transactions arise when a reporting entity does any of the following: Buys or sells on credit goods or services whose prices are denominated in foreign currency Borrows or lends funds and the amounts payable or receivable are denominated in foreign currency Is a party to an unperformed forward exchange contract For other reasons, acquires or disposes of assets, or incurs or settles liabilities denominated in foreign currency.") is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be recorded in the [functional currency](https://asc.understandingaccounting.org/glossary/f/#functional-currency "An entity's functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which an entity primarily generates and expends cash. (See paragraphs 830-10-45-2830-10-45-3830-10-45-4830-10-45-5830-10-45-6 and 830-10-55-3830-10-55-4830-10-55-5830-10-55-6830-10-55-7.)") of the recording entity.

##### [830-20-25-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-25-2)

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Paragraphs

[830-10-55-3 through 55-7](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-3)

provide guidance on the determination of a reporting entity's functional currency. Paragraph [830-10-45-17](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-17) states that if an entity's books of record are not maintained in its functional currency, remeasurement into the functional currency is required before [translation](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") into the reporting currency. That paragraph provides further guidance on remeasurement of books and records.