# ASC 830-946-05: Foreign Currency Matters — Financial Services—Investment Companies — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/830/946/#05-overview-and-background)

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## ASC 830-946-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/830/946/#05-overview-and-background)

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##### [830-946-05-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-05-1)

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This Subtopic provides guidance on computing and reporting foreign currency transaction gains or losses for investment companies that do any of the following:

1.  a
    
    Invest in securities denominated or expected to settle in currencies other than the U.S. dollar
    
2.  b
    
    Invest in currencies other than the U.S. dollar
    
3.  c
    
    Have foreign currency transactions.

##### [830-946-05-2](https://asc.understandingaccounting.org/asc/830/946/#830-946-05-2)

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A foreign currency gain or loss (whether realized or unrealized) results from any of the following sources:

1.  a
    
    The cost of securities held versus their carrying value based on current exchange rates
    
2.  b
    
    Payables or receivables for securities bought or sold at the transaction date versus actual amounts at settlement date or payable or receivable based on current exchange rates
    
3.  c
    
    Interest, dividends, and withholding taxes accrued versus the amount received or receivable based on current exchange rates
    
4.  d
    
    Expenses accrued versus the amount paid or payable in foreign currency, based on current exchange rates
    
5.  e
    
    [Forward exchange contracts](https://asc.understandingaccounting.org/glossary/f/#forward-exchange-contract "A forward exchange contract is an agreement between two parties to exchange different currencies at a specified exchange rate at an agreed-upon future date.") or foreign exchange futures contracts subsequently measured at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.").

#### Withholding Tax

##### [830-946-05-3](https://asc.understandingaccounting.org/asc/830/946/#830-946-05-3)

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This Subtopic includes guidance on effects of withholding tax. Dividends and interest received from foreign investments may result in withholding taxes and other taxes imposed by foreign countries, usually at rates from 10 percent to 35 percent. Tax treaties between certain countries and the United States may reduce or eliminate such taxes.