# ASC 830-30: Foreign Currency Matters — Translation of Financial Statements Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/830/30/) 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): 2026-09-10T01:47:09.290Z to 2026-09-10T01:47:45.334Z Record version: sha256:a437d9bd4dd223c54f4b7b4b9f3727ce60686a37ac6c0ada57b3e93ce0c84861 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30: Foreign Currency Matters — Translation of Financial Statements ### Machine-generated study aids ```json { "summary": "ASC 830-30 governs how a reporting entity translates the financial statements of a foreign entity whose functional currency is not the reporting currency, when those statements are consolidated, combined, or accounted for under the equity method. Assets and liabilities are translated at the balance sheet date rate and revenues, expenses, gains, and losses at the rates on the dates recognized; the resulting translation adjustments go to other comprehensive income (accumulated as the cumulative translation adjustment, or CTA) rather than net income. The CTA is released into earnings only upon sale or complete or substantially complete liquidation of the investment in the foreign entity.", "key_points": [ "All elements are translated at current rates: assets and liabilities at the balance sheet date rate, and revenues, expenses, gains, and losses (including allocations such as depreciation, cost of sales, and amortization) at the rates on the dates they are recognized, not the rates when the related items originated (830-30-45-3; 830-30-45-4).", "Translation adjustments are excluded from net income and reported in other comprehensive income; accumulated translation adjustments attributable to noncontrolling interests are allocated to the noncontrolling interest (830-30-45-12; 830-30-45-17).", "Upon sale or complete or substantially complete liquidation of an investment in a foreign entity, the related CTA is removed from equity and reported as part of the gain or loss on the sale or liquidation (830-30-40-1); a 'sale' includes loss of a controlling financial interest and a step acquisition in which the acquirer obtains control of a foreign equity method investee (830-30-40-1A).", "Sale of part of an equity method investment in a foreign entity releases a pro rata portion of the CTA into the gain or loss, but partial liquidations of net assets within a foreign entity release no CTA until the 830-30-40-1 criteria are met (830-30-40-2; 830-30-40-3).", "The rate applicable to dividend remittances is normally used; if exchangeability is temporarily lacking, the first subsequent rate at which exchanges can be made is used, and if the lack is other than temporary the propriety of consolidation, combination, or equity method accounting must be reconsidered (830-30-45-6; 830-30-45-9; Example 1 at 830-30-55-1).", "CTA is included in the carrying amount of the investment for impairment testing only when the entity has committed to a plan that will cause the CTA to be reclassified to earnings; the effective net investment hedge portion of CTA is also included (830-30-45-13; 830-30-45-15).", "Intra-entity profit eliminations use exchange rates at the dates of the sales or transfers (reasonable approximations or averages permitted), financial statements are not adjusted for rate changes occurring after the balance sheet date, and an analysis of changes in accumulated translation adjustments (beginning/ending balances, period adjustment, allocated income taxes, and amounts transferred to net income) must be presented in a separate statement, the notes, or the statement of changes in equity (830-30-45-10; 830-30-45-16; 830-30-45-18 through 45-20; 830-30-50-1)." ], "categories": [ "Foreign currency", "Presentation", "Disclosure", "Consolidation" ], "audience_level": "intermediate", "student_note": "Exam questions hinge on two distinctions: remeasurement gains/losses (830-20, to net income) versus translation adjustments (830-30, to OCI), and what counts as a triggering event for releasing CTA. The most common error is assuming any cash distribution or partial liquidation of a foreign entity's net assets recycles CTA — it does not; only a sale or complete/substantially complete liquidation (or a partial sale of an equity method interest, pro rata) does.", "related_topics": [ "830-10", "830-20", "220-10", "740-30", "810-10", "323-10" ], "key_concepts": [ "cumulative translation adjustment", "current rate method", "functional currency", "reporting currency", "other comprehensive income", "sale or substantially complete liquidation of a foreign entity", "net investment hedge", "intra-entity profit elimination" ] } ``` Source downloaded (UTC): 2026-09-10T01:47:09.290Z to 2026-09-10T01:47:09.290Z Record version: sha256:7947f54ba79041635b2a470d7d77c77bb84181a82c481a79cb68bf5b2d4e1d66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/830/30/#00-status) SEC content: no ##### [830-30-00-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:09.290Z to 2026-09-10T01:47:09.290Z Record version: sha256:875a1380cd9d6a8cd6860727980b5c4d278295a47935fc669f59753faf8494d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Conduit Debt SecurityAddedMaintenance Update 2014-20 (PDF)09/29/2014
Nonpublic Entity (Def. 1)AmendedMaintenance Update 2014-20 (PDF)09/29/2014
830-30-40-1 through 40-3
AmendedAccounting Standards Update No. 2013-0503/04/2013
830-30-40-1AAddedAccounting Standards Update No. 2013-0503/04/2013
830-30-40-4AmendedMaintenance Update 2017-19 (PDF)11/15/2017
830-30-45-1AmendedAccounting Standards Update No. 2015-0101/09/2015
830-30-45-20AmendedMaintenance Update 2018-12 (PDF)09/10/2018
830-30-45-21AmendedAccounting Standards Update No. 2015-0101/09/2015
830-30-45-22SupersededAccounting Standards Update No. 2015-0101/09/2015
830-30-65-1AddedAccounting Standards Update No. 2013-0503/04/2013
Source downloaded (UTC): 2026-09-10T01:47:11.666Z to 2026-09-10T01:47:11.666Z Record version: sha256:7b0fc49fcd55e8d5d7010fb58f10aeb6f27a7b7aa4d16d2e1d35e9a54b7c8c8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/830/30/#05-overview-and-background) SEC content: no ##### [830-30-05-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:11.666Z to 2026-09-10T01:47:11.666Z Record version: sha256:428c8c6da5318b4b97a7ad681230f29a67046409528f764fc3eea03026d15a10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for translating [foreign currency statements](https://asc.understandingaccounting.org/glossary/f/#foreign-currency-statements "Financial statements that employ as the unit of measure a functional currency that is not the reporting currency of the reporting entity.") that are incorporated in the financial statements of 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.") by consolidation, combination, or the equity method of accounting. Source downloaded (UTC): 2026-09-10T01:47:13.486Z to 2026-09-10T01:47:13.486Z Record version: sha256:e8507e1cfeb381419c7e164fe4273ee9de6577703d43242c7d5d3b136d574156 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/830/30/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [830-30-15-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:13.486Z to 2026-09-10T01:47:13.486Z Record version: sha256:1e99718192557b6c7fe4783e191f29a64fe4e7547d56015c505c0de498fa875d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 830-10-15. Source downloaded (UTC): 2026-09-10T01:47:20.033Z to 2026-09-10T01:47:20.033Z Record version: sha256:f345f6a0906c43fb625f3727a0928a4b32d16dfdd587e6aea8bff24a28f9f4d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/830/30/#40-derecognition) SEC content: no #### Sale or Liquidation of an Investment in a Foreign Entity ##### [830-30-40-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:20.033Z to 2026-09-10T01:47:20.033Z Record version: sha256:e468ca7a48d6f9453d0fc1bf5fea1c76056eb6430316d8cfc7d12d97901d37d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon sale or upon complete or substantially complete liquidation of an investment in a [foreign entity](https://asc.understandingaccounting.org/glossary/f/#foreign-entity "An operation (for example, subsidiary, division, branch, joint venture, and so forth) whose financial statements are both: Prepared in a currency other than the reporting currency of the reporting entity Combined or consolidated with or accounted for on the equity basis in the financial statements of the reporting entity."), the amount attributable to that entity and accumulated in the translation adjustment component of equity shall be both: 1. a Removed from the separate component of equity 2. b Reported as part of the gain or loss on sale or liquidation of the investment for the period during which the sale or liquidation occurs. ##### [830-30-40-1A](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:20.033Z to 2026-09-10T01:47:20.033Z Record version: sha256:cb58a9e66876be0cb09fb64f505011ed6ffb17564a88488b026e5e4b432dbe5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A sale shall include: 1. a The loss of a controlling financial interest in an investment in a foreign entity resulting from circumstances contemplated by Subtopic 810-10 (see paragraph [810-10-55-4A](https://asc.understandingaccounting.org/asc/810/10/#810-10-55-4A) for related implementation guidance) 2. b An acquirer obtaining control of an acquiree in which it held an equity interest, accounted for as an equity method investment that is a foreign entity, immediately before the acquisition date in a business combination achieved in stages (see paragraphs [805-10-25-9 through 25-10](https://asc.understandingaccounting.org/asc/805/10/#805-10-25-9) ). ##### [830-30-40-2](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:20.033Z to 2026-09-10T01:47:20.033Z Record version: sha256:ddb397ac6c4dc5effaed465b4e6b7de83385d5ee28dcdfa195e370a74d260e85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If 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.") sells part of its ownership interest in an equity method investment that is a foreign entity, a pro rata portion of the accumulated translation adjustment component of equity attributable to that equity method investment shall be recognized in measuring the gain or loss on the sale. If the sale of part of an equity method investment that is a foreign entity results in the loss of significant influence, see paragraphs [323-10-35-37 through 35-39](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-37) for guidance on how to account for the pro rata portion of the accumulated translation adjustment component of equity attributable to the remaining investment. For guidance if an entity sells a noncontrolling interest in a consolidated foreign entity, but still retains a controlling financial interest in the foreign entity, see paragraph [810-10-45-23 through 45-24](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-23) . ##### [830-30-40-3](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:20.033Z to 2026-09-10T01:47:20.033Z Record version: sha256:189117b2a4de19f32168d085b30e01d451752943cfc24631b589c2ffc390a2e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although partial liquidations by a parent of net assets held within a foreign entity may be considered similar to a sale of part of an ownership interest in the foreign entity if the liquidation proceeds are distributed to the parent, extending pro rata recognition (release of the cumulative translation adjustment into net income) to such partial liquidations would require that their substance be distinguished from ordinary dividends. Such a distinction is neither possible nor desirable. For those partial liquidations, no cumulative translation adjustment is released into net income until the criteria in paragraph [830-30-40-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-1) are met. ##### [830-30-40-4](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:20.033Z to 2026-09-10T01:47:20.033Z Record version: sha256:e791c0c3017ffab0bbcc318a69c52d7662a05d8104255911c873cf68aeac205d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under Subtopic 220-20, a gain or loss on disposal of part or all of a net investment may be recognized in a period other than that in which actual sale or liquidation occurs. Paragraph [830-30-40-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-1) does not alter the period in which a gain or loss on sale or liquidation is recognized under existing generally accepted accounting principles (GAAP). Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:13b17025a008cc663fdc1ca18be0b5539284b69a853072d56b5833d617261945 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/830/30/#45-other-presentation-matters) SEC content: no ##### [830-30-45-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:682bd95ece424b23f6440e74b113c6349dc8a8f873acfc0bfb0c638925601222 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Section discusses how 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.") translates [foreign currency statements](https://asc.understandingaccounting.org/glossary/f/#foreign-currency-statements "Financial statements that employ as the unit of measure a functional currency that is not the reporting currency of the reporting entity.") and analyzes changes in the cumulative translation adjustment. It also addresses two related reporting matters. The guidance is organized as follows: 1. a Translation of foreign currency statements 2. b Analysis of changes in cumulative translation adjustment 3. c Reporting other comprehensive income—income tax consequences of rate changes 4. d [Subparagraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). #### Translation of Foreign Currency Statements ##### [830-30-45-2](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:312b97dae566f35de2b3165409a422cdcabdc759b4c17fbe82fa9f5f5f79095c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance on translation of foreign currency statements is organized as follows: 1. a [Translation](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") using current [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.") 2. b Elimination of intra-entity profits 3. c Translation after a business combination 4. d Reporting [translation adjustments](https://asc.understandingaccounting.org/glossary/t/#translation-adjustments "Translation adjustments result from the process of translating financial statements from the entity's functional currency into the reporting currency.") 5. e Subsequent change in exchange rate 6. f Cumulative translation adjustments attributable to [noncontrolling interests](https://asc.understandingaccounting.org/glossary/n/#noncontrolling-interest "The portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. A noncontrolling interest is sometimes called a minority interest."). ##### [830-30-45-3](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:eb3fd0dc7d89afe7c2ba175491f467516bfb4f3493fe69cbbbed9221714cc6c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All elements of financial statements shall be translated by using a current exchange rate as follows: 1. a For assets and liabilities, the exchange rate at the balance sheet date shall be used. 2. b For revenues, expenses, gains, and losses, the exchange rate at the dates on which those elements are recognized shall be used. This guidance also applies to accounting allocations (for example, depreciation, cost of sales, and amortization of deferred revenues and expenses) and requires translation at the current exchange rates applicable to the dates those allocations are included in revenues and expenses (that is, not the rates on the dates the related items originated). ##### [830-30-45-4](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:3493433825a6aea724b9cafb6d579d9ab6acf2b86ead0a2d53d4c21eb274bfc6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of translation of financial statements referred to in this Subtopic, the current exchange rate is the rate as of the end of the period covered by the financial statements or as of the dates of recognition in those statements in the case of revenues, expenses, gains, and losses. ##### [830-30-45-5](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:b20754a0abb9849a1d0ba4f4f5a7eddb5f141b5ded78bebdc87022fb75c63516 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [830-10-55-10 through 55-11](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-10) address the use of averages or other methods of approximation. ##### [830-30-45-6](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:f7db0f72ba6ba7fa25c95e8e0dc211eff208ee9974f882b15045455a7c8c994e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the absence of unusual circumstances, the exchange rate applicable to [conversion](https://asc.understandingaccounting.org/glossary/c/#conversion "The exchange of one currency for another.") of a currency for purposes of dividend remittances shall be used to translate foreign currency statements. ##### [830-30-45-7](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:0ddd8afbe109518bdd1d2d1d4b550ebd684377b38cbc9fd3ccf82f4a74e2526a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If unsettled intra-entity transactions are subject to and translated using preference or penalty rates, translation of foreign currency statements at the rate applicable to dividend remittances may cause a difference between intra-entity receivables and payables. Until that difference is eliminated by settlement of the intra-entity transaction, the difference shall be treated as a receivable or payable in the reporting entity's financial statements. ##### [830-30-45-8](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:d4faa98d6806195eba42862cbba405f8284e3c6ca1329817549e5dfed3468b24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a [foreign entity](https://asc.understandingaccounting.org/glossary/f/#foreign-entity "An operation (for example, subsidiary, division, branch, joint venture, and so forth) whose financial statements are both: Prepared in a currency other than the reporting currency of the reporting entity Combined or consolidated with or accounted for on the equity basis in the financial statements of the reporting entity.") whose balance sheet date differs from that of the reporting entity is consolidated or combined with or accounted for by the equity method in the financial statements of the reporting entity, the current rate is the rate in effect at the foreign entity's balance sheet date for purposes of applying the requirements of this Subtopic to that foreign entity. ##### [830-30-45-9](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:ff21f8038fa3c321a8c3bd5a7b0d68f06905cb4a4a5c88e9d99a50d35f4c76ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If exchangeability between two currencies is temporarily lacking at the [transaction date](https://asc.understandingaccounting.org/glossary/t/#transaction-date "The date at which a transaction (for example, a sale or purchase of merchandise or services) is recorded in accounting records in conformity with generally accepted accounting principles (GAAP). A long-term commitment may have more than one transaction date (for example, the due date of each progress payment under a construction contract is an anticipated transaction date).") or balance sheet date, the first subsequent rate at which exchanges could be made shall be used for purposes of this Subtopic. If the lack of exchangeability is other than temporary, the propriety of consolidating, combining, or accounting for the foreign operation by the equity method in the financial statements of the reporting entity shall be carefully considered. Example 1 (see paragraph [830-30-55-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-55-1)) illustrates the application of this paragraph. ##### [830-30-45-10](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:a4975d7412ffd5abe9f40ebbb68cfdaddd6a70841e167064ea06befff7928dcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The elimination of intra-entity profits that are attributable to sales or other transfers between entities that are consolidated, combined, or accounted for by the equity method in the reporting entity's financial statements shall be based on the exchange rates at the dates of the sales or transfers. The use of reasonable approximations or averages is permitted. ##### [830-30-45-11](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:f95187cfbb6c7bdb06aa0a099dda538d80677216e36d2fe4addd5669010576ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. After a business combination, the amount assigned at the acquisition date to the assets acquired and the liabilities assumed (including goodwill or the gain recognized for a bargain purchase in accordance with Subtopic 805-30) shall be translated in conformity with the requirements of this Subtopic. ##### [830-30-45-12](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:07d8a8ea3e844b5ef1da2ad9ac9eb099df419164419c9a8dff547b4b9a6a6fcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity's [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.)") is a [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."), translation adjustments result from the process of translating that entity's financial statements into the reporting currency. Translation adjustments shall not be included in determining net income but shall be reported in other comprehensive income. ##### [830-30-45-13](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:5627f6705b22a9b63491f87a24225484b7819a56859ba8c5edea70f89bf62858 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that has committed to a plan that will cause the cumulative translation adjustment for an equity method investment or a consolidated investment in a foreign entity to be reclassified to earnings shall include the cumulative translation adjustment as part of the carrying amount of the investment when evaluating that investment for impairment. The scope of this guidance includes an investment in a foreign entity that is either consolidated by the reporting entity or accounted for by the reporting entity using the equity method. This guidance does not address either of the following: 1. a Whether the cumulative translation adjustment shall be included in the carrying amount of the investment when assessing impairment for an investment in a foreign entity when the reporting entity does not plan to dispose of the investment (that is, the investment or related consolidated assets are held for use) 2. b Planned transactions involving foreign investments that, when consummated, will not cause a reclassification of some amount of the cumulative translation adjustment. ##### [830-30-45-14](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:384137f5b812521da8ed7bc20b9021ed176671a1855725ee888eee595a6dc2b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In both cases, paragraph [830-30-40-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-1) is clear that no basis exists to include the cumulative translation adjustment in an impairment assessment if that assessment does not contemplate a planned sale or liquidation that will cause reclassification of some amount of the cumulative translation adjustment. (If the reclassification will be a partial amount of the cumulative translation adjustment, this guidance contemplates only the cumulative translation adjustment amount subject to reclassification pursuant to paragraphs [830-30-40-2 through 40-4](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-2) .) ##### [830-30-45-15](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:9b989891fe1d1739506b8e2f1aca6e8e03aeff394a480c9db4f158ab90670cb8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall include the portion of the cumulative translation adjustment that represents a gain or loss from an effective hedge of the net investment in a foreign operation as part of the carrying amount of the investment when evaluating that investment for impairment. ##### [830-30-45-16](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:2ed3f0bb5fc92c393ef23f99ca2f82542d0157783039603e5f358a7e0a6e6a7d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 or after the date of the foreign currency statements of a foreign entity if they are consolidated, combined, or accounted for by the equity method in the financial statements of the reporting entity. ##### [830-30-45-17](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:f82c6ffd5fea5a07d6d7068295d1d9986b98ad378535918423b966e27b91d592 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accumulated translation adjustments attributable to noncontrolling interests shall be allocated to and reported as part of the noncontrolling interest in the consolidated reporting entity. #### Analysis of Changes in Cumulative Translation Adjustment ##### [830-30-45-18](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:a68e33ed222719bc64a77956fe49df121b313c29ca2c0b6b57a12cc9ff93d6ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An analysis of the changes during the period in the accumulated amount of translation adjustments reported in equity shall be provided in any of the following ways: 1. a In a separate financial statement 2. b In notes to financial statements 3. c As part of a statement of changes in equity. ##### [830-30-45-19](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:bc795f299cfc58163127e8f777f99e216d942b000a3f12fabe6453d2e0608229 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This accumulated amount in equity might be titled Equity Adjustment from [Foreign Currency Translation](https://asc.understandingaccounting.org/glossary/f/#foreign-currency-translation "The process of expressing in the reporting currency of the reporting entity those amounts that are denominated or measured in a different currency.") or given a similar title. ##### [830-30-45-20](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:8a00e22dae43f0983a9d807411732a8e882cf99ff56b9936dad8aa9a4267c471 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At a minimum, the analysis shall disclose all of the following (see paragraph [830-30-50-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-50-1)): 1. a Beginning and ending amount of cumulative translation adjustments 2. b The aggregate adjustment for the period resulting from translation adjustments (see paragraph [830-30-45-12](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-12)) and gains and losses from certain hedges and intra-entity balances (see paragraph [830-20-35-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-3)). 3. c The amount of income taxes for the period allocated to translation adjustments (see paragraph [830-30-45-21](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-21)) 4. d The amounts transferred from cumulative translation adjustments and included in determining net income for the period as a result of the sale or complete or substantially complete liquidation of an investment in a foreign entity (see paragraph [830-30-40-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-40-1)). #### Reporting Other Comprehensive Income—Income Tax Consequences of Rate Changes ##### [830-30-45-21](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:5e60a52ceb3d59d483c1bb5d0085585e1524e8c83b28efb3ffd383ebb0f38364 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Subtopic 740-10 requires income tax expense to be allocated among income from continuing operations, discontinued operations, adjustments of prior periods (or of the opening balance of retained earnings), and direct entries to other equity accounts. All translation adjustments are reported in other comprehensive income. Any income taxes related to those translation adjustments shall be allocated to other comprehensive income. Translation adjustments are accounted for in the same way as temporary differences under the provisions of Subtopic 740-10. If under the requirements of Subtopic 740-30 deferred taxes are not provided for unremitted earnings of a subsidiary, in those instances, deferred taxes shall not be provided on translation adjustments. ##### [830-30-45-22](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:22.947Z to 2026-09-10T01:47:22.947Z Record version: sha256:ffd51d9966b1f4c726f93a7d36d71256f091ac5fcd8427f5b88430e3e7272656 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). Source downloaded (UTC): 2026-09-10T01:47:25.775Z to 2026-09-10T01:47:25.775Z Record version: sha256:7828a98b4daef8b468c47dec0969daaea4a8f203fd814846acf9e537a13bc939 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/830/30/#50-disclosure) SEC content: no #### Analysis of Changes in Cumulative Translation Adjustment ##### [830-30-50-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:25.775Z to 2026-09-10T01:47:25.775Z Record version: sha256:9103041b609bb273f89a4c19dfbdb9618d683fe48cf91ff789592f61b9cf3fd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If not provided in a separate financial statement or as part of a statement of changes in equity, an analysis of the changes during the period in the accumulated amount of [translation adjustments](https://asc.understandingaccounting.org/glossary/t/#translation-adjustments "Translation adjustments result from the process of translating financial statements from the entity's functional currency into the reporting currency.") reported in equity shall be provided in notes to financial statements. At a minimum, the analysis shall disclose the items enumerated in paragraph [830-30-45-20](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-20). #### Subsequent Rate Changes ##### [830-30-50-2](https://asc.understandingaccounting.org/asc/830/30/#830-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:25.775Z to 2026-09-10T01:47:25.775Z Record version: sha256:e52f91f9f316f991c6cb1cf57094c817af40d4150a0e5acd5f09b432d54b3b93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure of a rate change that occurs after the date of the reporting entity's financial statements or after the date of the [foreign currency statements](https://asc.understandingaccounting.org/glossary/f/#foreign-currency-statements "Financial statements that employ as the unit of measure a functional currency that is not the reporting currency of the reporting entity.") of a [foreign entity](https://asc.understandingaccounting.org/glossary/f/#foreign-entity "An operation (for example, subsidiary, division, branch, joint venture, and so forth) whose financial statements are both: Prepared in a currency other than the reporting currency of the reporting entity Combined or consolidated with or accounted for on the equity basis in the financial statements of the reporting entity.") if they are consolidated, combined, or accounted for by the equity method in the financial statements of the [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.") and its effects on unsettled balances pertaining to [foreign currency transactions](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."), if significant, may be necessary. Source downloaded (UTC): 2026-09-10T01:47:27.447Z to 2026-09-10T01:47:27.447Z Record version: sha256:5790e602598560892399b747f2dc64867d00b02fcd046e8272509b22efae5b0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/830/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [830-30-55-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:27.447Z to 2026-09-10T01:47:27.447Z Record version: sha256:85343930c57e9a22fc7eb1b6027984e303d137f7ff96cb6ad6ec438d713aa546 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T01:47:30.341Z to 2026-09-10T01:47:30.341Z Record version: sha256:c63bfb0eb0e35dd70b66e0fea9e185c8e507fbc574bfbb544cf5a7430832fa8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/830/30/#60-relationships) SEC content: no #### Comprehensive Income ##### [830-30-60-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:30.341Z to 2026-09-10T01:47:30.341Z Record version: sha256:cc25e0a1f53972ed31a2ccca90940543284c961fa69b34261a565520ddb222d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on reporting foreign-currency-related components of comprehensive income, see Topic 220. #### Income Taxes ##### [830-30-60-2](https://asc.understandingaccounting.org/asc/830/30/#830-30-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:30.341Z to 2026-09-10T01:47:30.341Z Record version: sha256:b3aaeebee46d71205d8eab8dd98a3a5290c70adfd0aaf45588f6b22c5e6db6e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on whether deferred taxes shall be provided for [translation adjustments](https://asc.understandingaccounting.org/glossary/t/#translation-adjustments "Translation adjustments result from the process of translating financial statements from the entity's functional currency into the reporting currency."), see Topic 740. Source downloaded (UTC): 2026-09-10T01:47:32.925Z to 2026-09-10T01:47:32.925Z Record version: sha256:9d91a548049c17930ce94d673297fb3b5308146692efea6983cbc0d904917a26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/830/30/#65-transition-and-open-effective-date-information) SEC content: no ##### [830-30-65-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:32.925Z to 2026-09-10T01:47:32.925Z Record version: sha256:350cc613d7807bdc7c035a0f27b26b0d52e4f2d94fe62160c7c214f4550bb3a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/08/2016 after the end of the transition period stated in Accounting Standards Update No. 2013-05, _Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity_. Source downloaded (UTC): 2026-09-10T01:47:38.445Z to 2026-09-10T01:47:38.445Z Record version: sha256:ed1b26292166bc1a313a3a1b93319b74c98297fd1efc1d824a2c28e0ce5e202e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/830/30/#sec-00-status) SEC content: yes ##### [830-30-S00-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:38.445Z to 2026-09-10T01:47:38.445Z Record version: sha256:7910235ca32f9c77c950704e77872ffe6fa189d14d2cd6e65a92377e93c988d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
830-30-S99-1AddedAccounting Standards Update No. 2010-1905/11/2010
Source downloaded (UTC): 2026-09-10T01:47:45.334Z to 2026-09-10T01:47:45.334Z Record version: sha256:38483f3b51fc84813cd4616917b25aa691d84753d07c25076721630ed6f6063c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-30-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/830/30/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [830-30-S99-1](https://asc.understandingaccounting.org/asc/830/30/#830-30-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:45.334Z to 2026-09-10T01:47:45.334Z Record version: sha256:2cdd90327e5ec9112989da32d51c24ad42a24be6f1ee0d2333818db08d4be9bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This SEC staff announcement provides the SEC staff's views on Foreign Currency Issues. - The SEC staff has received a number of inquiries regarding certain foreign currency issues related to investments in Venezuela. This announcement is in response to those inquiries that have been received by the SEC staff on the issues described below. - Amongst other requirements, current restrictions of foreign currency exchange in Venezuela provide that entities use the official rate of exchange (official rate) to exchange funds. The official rate is set by the Venezuelan government and in order to use the official rate to exchange currency, entities seek the ability to utilize the official rate from Venezuela's Commission for Administration of Foreign Currencies (CADIVI). - As an alternative to the use of the official rate it may also be legal to utilize the parallel rate. It is possible that the parallel rate provides entities with a more liquid exchange and entities can access the parallel rate using a series of transactions via a broker. The parallel rate has recently been significantly different from the official rate. - **Reported Balances in an Entity's Financial Statements That Differ from Their Underlying U.S. Dollar Denominated Values** - With respect to accounting for a subsidiary in Venezuela in cases where the parent's reporting currency is the U.S. dollar and the Venezuelan subsidiary's functional currency is the Venezuelan Bolivar (“Bolivar” or “BsF”), the staff has recently become aware of the following fact pattern: In years prior to 2010, certain entities may have used the parallel rate to remeasure certain U.S. dollar denominated balances that the Venezuelan subsidiary held and then subsequently translated the Venezuelan subsidiary's assets, liabilities, and operations using the official rate. The effect of this accounting treatment resulted in reported balances in an entity's financial statements that differed from their underlying U.S. dollar denominated values. (The staff notes that these differences arise when different rates are used for remeasurement and translation.) In order to illustrate the impact that these differences may have on different accounts within the financial statements, two illustrations are provided below. - First, assume that at a period end prior to January 1, 2010 (for a calendar year entity), a U.S. entity's Venezuelan subsidiary held $10 million of cash denominated in U.S. dollars. Further assume that at the period end, the parallel rate was 5 Bolivars to every 1 U.S. dollar and the official rate was 2 Bolivars to every 1 U.S. dollar. Upon the remeasurement of the U.S. denominated cash to Bolivars and the subsequent translation of the Venezuelan subsidiary's financial statements, an entity would have reported cash of $25 million for financial reporting purposes. (The $25 million is calculated as follows: First, the $10 million of cash is remeasured using the parallel rate to 50 million BsF; subsequently, the 50 million BsF is translated back to U.S. dollars using the official rate of 2 Bolivars to 1 U.S dollars, resulting in a translated reported balance of $25 million.) - Second, assume that at a period end prior to January 1, 2010 (for a calendar year entity), a U.S. entity's Venezuelan subsidiary held $15 million of accounts payable denominated in U.S. dollars (also assume the exchange rates are the same as in the example above). Upon the remeasurement of the U.S. denominated accounts payables to Bolivars and the subsequent translation of the Venezuelan subsidiary's financial statements, an entity would have reported accounts payable of $37.5 million for financial reporting purposes. (The $37.5 million is calculated as follows: First, the $15 million of accounts payable is remeasured using the parallel rate to 75 million BsF; subsequently, the 75 million BsF is translated back to U.S. dollars using the official rate of 2 Bolivars to 1 U.S. dollars, resulting in a translated reported balance of $37.5 million.) - Finally, the staff has noted that Venezuela has met the thresholds for being considered highly inflationary and accordingly, calendar year entities that have not previously accounted for their Venezuelan investment as highly inflationary will begin applying highly inflationary accounting beginning January 1, 2010. - **Disclosures** - The staff believes that in cases where reported balances for financial reporting purposes differ from the actual U.S. dollar denominated balances (such as in the illustrations above), a registrant should make disclosures that inform users of the financial statements as to the nature of these differences. When material, the disclosures in both annual and interim financial statements should, at a minimum, consist of the following (The staff is aware that certain registrants have already filed their 2009 Form 10-K's and accordingly the staff would not necessarily expect these specific disclosures to be included in these registrant's 2009 Form 10-K's.): - • Disclosure of the rates used for remeasurement and translation. - • A description of why the actual U.S. dollar denominated balances differ from the amounts reported for financial reporting purposes, including the reasons for using two different rates with respect to remeasurement and translation. - • Disclosure of the relevant line items (e.g. cash, accounts payable) on the financial statements for which the amounts reported for financial reporting purposes differ from the underlying U.S. dollar denominated values. - • For each relevant line item, the difference between the amounts reported for financial reporting purposes versus the underlying U.S. dollar denominated values. - • Disclosure of the amount that will be recognized through the income statement (as well as the impact on the other financial statements) as part of highly inflationary accounting beginning in 2010 (see below). - **Impact of Highly Inflationary Accounting on Differences between Amounts Recorded for Financial Reporting Purposes versus the Underlying U.S. Dollar Denominated Values** - The staff notes that upon application of highly inflationary accounting (January 1, 2010 for calendar year registrants), registrants must follow the accounting outlined in paragraph [830-10-45-11](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-11), which states that “the financial statements of a foreign entity in a highly inflationary economy shall be remeasured as if the functional currency were the reporting currency.” - Accordingly, upon the application of highly inflationary accounting requirements, a U.S. reporting currency parent and subsidiary effectively utilize the same currency (U.S. dollars) and accordingly there should no longer be any differences between the amounts reported for financial reporting purposes and the amount of any underlying U.S. dollar denominated values that are held by the subsidiary. Therefore, the staff believes that any differences that may have existed prior to applying highly inflationary accounting requirements between the reported balances for financial reporting and the U.S. dollar denominated balances should be recognized in the income statement, unless the registrant can document that the difference was previously recognized as a cumulative translation adjustment (in which case the difference should be recognized as an adjustment to the cumulative translation adjustment). - Furthermore, the staff believes that these differences should be recognized at the time of adoption of highly inflationary accounting. - **Other** - The SEC staff is aware that the EITF will be discussing certain issues related to foreign currency, including the accounting for multiple exchange rates in Venezuela, and accordingly the guidance in this staff announcement is intended to be interim guidance pending the EITF completing its deliberations.