# ASC 830-20-55: Foreign Currency Matters — Foreign Currency Transactions — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/830/20/#55-implementation-guidance-and-illustrations) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:47:04.710Z to 2026-09-10T01:47:04.710Z Record version: sha256:0f336680e7fd8e5076047531554ecb836ecc0827181625f1643555e00c62a947 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/830/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [830-20-55-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:04.710Z to 2026-09-10T01:47:04.710Z Record version: sha256:db5657054393a91b8681f9e5453221fdf36d3729896748ee056d29accae8990c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance applies to a transaction with all of the following characteristics: 1. a In a secondary-market transaction, a U.S. entity purchases—at less than the face amount—some dollar-denominated debt due from a foreign government or an entity that operates in that foreign country. 2. b Simultaneously, the U.S. entity exchanges the debt with the foreign country's government in a transaction denominated in the foreign currency. 3. c The [exchange rate](https://asc.understandingaccounting.org/glossary/e/#exchange-rate "The ratio between a unit of one currency and the amount of another currency for which that unit can be exchanged at a particular time.") used to obtain the [foreign currency](https://asc.understandingaccounting.org/glossary/f/#foreign-currency "A currency other than the functional currency of the entity being referred to (for example, the dollar could be a foreign currency for a foreign entity). Composites of currencies, such as the Special Drawing Rights, used to set prices or denominate amounts of loans, and so forth, have the characteristics of foreign currency.") is the official exchange rate (less a transaction fee). 4. d The U.S. entity is required by the foreign government to invest the foreign currency proceeds in the entity's subsidiary operating in that foreign country. (The intent of the foreign government may be to induce the U.S. entity to make an investment in long-lived assets in the foreign country.) ##### [830-20-55-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:04.710Z to 2026-09-10T01:47:04.710Z Record version: sha256:56dadeb91ce761db787005b34388b9f15ea5e2753e7534a463a7b5cffc40d2e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount by which the [local currency](https://asc.understandingaccounting.org/glossary/l/#local-currency "The currency of a particular country being referred to.") proceeds translated at the official exchange rate exceed the purchase cost of the loan (referred to as _the excess_) shall be used to reduce the basis of the long-lived assets acquired or constructed to comply with the arrangement. If the arrangement does not specifically require the acquisition or construction of long-lived fixed assets, or if the excess exceeds the cost of the assets, the excess shall be used to reduce the carrying amount of existing long-lived assets other than goodwill. The excess shall be applied first to reduce the basis of the fixed asset with the longest remaining life. If that asset is reduced to zero, the remaining excess shall be applied to reduce the basis of the fixed asset with the next longest remaining life. If the cost of all fixed assets is reduced to zero, the remaining excess shall be reported as a bargain purchase as required by Subtopic 805-30. ##### [830-20-55-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:04.710Z to 2026-09-10T01:47:04.710Z Record version: sha256:4d53f2ff793b56a124c2a0c1ba304305f7d3d56da384a786ffa5fe4f428cd9ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance is applicable also to a debt-for-equity swap with both of the following characteristics (resulting in the excess being reported as a bargain purchase as required by Subtopic 805-30): 1. a The foreign branch has no significant assets or liabilities other than local currency debt and has an accumulated deficit. 2. b The proceeds from the debt-for-equity swap are used to extinguish the debt. ##### [830-20-55-4](https://asc.understandingaccounting.org/asc/830/20/#830-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:04.710Z to 2026-09-10T01:47:04.710Z Record version: sha256:93b87cea610071c1fa822c41a4362e9adc51e3b7007ecd69825b8f77929ea4da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [830-10-55-10](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-10) provides guidance on the use of averages or other methods of approximation in applying this Subtopic.