The following table identifies the changes made to this Subtopic.
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section
830-10-15, with specific transaction exceptions noted below.
Paragraphs
provide guidance on the determination of a reporting entity's functional currency.
Paragraph 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 into the reporting currency. That paragraph provides further guidance on remeasurement of books and records.
For a foreign currency transaction, the applicable rate at which a particular transaction could be settled at the transaction date shall be used to translate the transaction.
Paragraphs
discuss the use of averages or other methods of approximation.
At each balance sheet date, recorded balances that are denominated in a currency other than the functional currency of the recording entity shall be adjusted to reflect the current exchange rate. At a subsequent balance sheet date, the current rate is that rate at which the related receivable or payable could be settled at that date. Paragraphs
provide more information about exchange rates.
Intra-entity transactions and balances for which settlement is not planned or anticipated in the foreseeable future are considered to be part of the net investment. This might include balances that take the form of an advance or a demand note payable provided that payment is not planned or anticipated in the foreseeable future.
A reporting entity's financial statements shall not be adjusted for a rate change that occurs after the date of the reporting entity's financial statements.
Certain entities, primarily banks, are dealers in foreign exchange. Although certain gains or losses from dealer transactions may fit the definition of transaction gains or losses in this Subtopic, they may be disclosed as dealer gains or losses rather than as transaction gains or losses.
If not presented in the financial statements as discussed in paragraph 830-20-45-1, the aggregate transaction gain or loss included in determining net income for the period shall be disclosed in notes to financial statements. (P) December 16, 2026; (N) December 16, 2026
220-40-65-1If not presented in the financial statements as discussed in paragraph 830-20-45-1, the aggregate transaction gain or loss included in determining net income for the period shall be disclosed in notes to financial statements. See paragraphs for additional disclosure requirements.Management is encouraged to supplement the disclosures required by this Subtopic with an analysis and discussion of the effects of rate changes on the reported results of operations. This type of disclosure might include the mathematical effects of translating revenue and expenses at rates that are different from those used in a preceding period as well as the economic effects of rate changes, such as the effects on selling prices, sales volume, and cost structures. The purpose is to assist financial report users in understanding the broader economic implications of rate changes and to compare recent results with those of prior periods.
This guidance applies to a transaction with all of the following characteristics:
- 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.
- b
Simultaneously, the U.S. entity exchanges the debt with the foreign country's government in a transaction denominated in the foreign currency.
- c
- 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.)
Paragraph
830-10-55-10 provides guidance on the use of averages or other methods of approximation in applying this Subtopic.