# ASC 830-30-55: Foreign Currency Matters — Translation of Financial Statements — 55 Implementation Guidance and Illustrations

Source: FASB Accounting Standards Codification, Basic View

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## ASC 830-30-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/830/30/#55-implementation-guidance-and-illustrations)

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#### Illustrations

##### [830-30-55-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-55-1)

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This Example illustrates the appropriate [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.") to be used for translating financial statements when foreign exchange trading is temporarily suspended at year-end. The following are facts involving a [reporting entity](https://asc.understandingaccounting.org/glossary/r/#reporting-entity "An entity or group whose financial statements are being referred to. Those financial statements reflect any of the following: The financial statements of one or more foreign operations by combination, consolidation, or equity accounting Foreign currency transactions.") that had a significant subsidiary in Israel:

1.  a
    
    On December 29, 1988, the currency market was open and foreign currencies were traded. The exchange rate was FC 1.68 = USD 1.00.
    
2.  b
    
    On December 30, 1988, Israeli banks were officially open but foreign exchange trading was suspended until January 2, 1989. A devaluation to occur on January 2, 1989, was announced. Most businesses were closed for the holidays.
    
3.  c
    
    On December 31, 1988, banks were closed.
    
4.  d
    
    On January 1, 1989, banks were closed.
    
5.  e
    
    On January 2, 1989, foreign exchange transactions were executed but left unsettled until the following day when a new rate was to be established.
    
6.  f
    
    On January 3, 1989, a new exchange rate of FC 1.81 = USD 1.00 was established and was effective for transactions left unsettled the previous day.
    

Thus, exchangeability was temporarily lacking and the rate established as of January 3, 1989, the first subsequent rate, is the appropriate rate to use for translating the December 31, 1988, financial statements.