# ASC Topic 830: Foreign Currency Matters Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/830/) 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): 2026-09-10T01:46:09.742Z to 2026-09-10T01:48:09.816Z Record version: sha256:9b383d056a13c1d1df5c8cace10d3f47ab75749109d486382c828c224afda56c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 830 governs accounting for foreign currency, built on the functional currency concept: each entity measures its assets, liabilities, and operations in the currency of the primary economic environment in which it operates (830-10-45-2), determined by weighing the cash flow, sales price, sales market, expense, financing, and intra-entity indicators of 830-10-55-5. From that foundation, 830-20 handles transactions denominated in a currency other than the functional currency—recorded at the transaction-date rate, remeasured at each balance sheet date at the current rate, with transaction gains and losses in net income except for economic hedges of a net investment and long-term-investment-nature intra-entity balances (830-20-35-2, 35-3)—while 830-30 handles translation of a foreign entity's statements into the reporting currency, with assets and liabilities at the balance sheet rate, income items at rates on the dates recognized, and translation adjustments in OCI (the CTA), released to earnings only upon sale or complete or substantially complete liquidation (830-30-45-3, 45-4, 40-1). Special rules override the model for highly inflationary economies, which require remeasurement as if the reporting currency were the functional currency (830-10-45-11), and 830-946 gives investment companies detailed, largely elective rules for isolating the foreign currency component of gains and losses (830-946-45-4, 50-1). The single most important idea: identify the functional currency first, then remeasure (gains/losses to income) before you translate (adjustments to OCI). Source downloaded (UTC): 2026-09-10T01:46:09.742Z to 2026-09-10T01:46:30.713Z Record version: sha256:df02e5d4ef40d3d8bb040a06bdfbf9cc770e25e951246214ba8d785440a34582 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10: Foreign Currency Matters — Overall ### Machine-generated study aids ```json { "summary": "ASC 830-10 sets the scope and foundational framework for foreign currency accounting: it requires each foreign entity's assets, liabilities, and operations to be measured in that entity's functional currency—the currency of the primary economic environment in which it operates (830-10-45-2)—before amounts are translated into the reporting currency. It supplies the economic indicators (cash flow, sales price, sales market, expense, financing, and intra-entity indicators in 830-10-55-5) that management weighs to identify the functional currency, mandates remeasurement of books of record not kept in the functional currency using historical rates for specified nonmonetary items (830-10-45-17 through 45-18), and requires entities in highly inflationary economies (cumulative 3-year inflation ≈100% or more) to be remeasured as if the reporting currency were the functional currency (830-10-45-11).", "key_points": [ "The Topic applies to all entities, to all foreign currency transactions, and to all foreign currency statements incorporated by consolidation, combination, or the equity method; convenience translations for readers are outside its scope (830-10-15-2 through 15-7).", "Translation must both reflect the expected economic effects of rate changes on the reporting entity's cash flows and equity and preserve the results and relationships measured in each entity's functional currency under U.S. GAAP (830-10-10-2).", "The functional currency is the currency of the primary economic environment in which the entity primarily generates and expends cash; it is a matter of fact requiring management judgment weighing cash flow, sales price, sales market, expense, financing, and intra-entity indicators (830-10-45-2, 45-6, 830-10-55-5).", "A single entity with distinct and separable operations in different economic environments may have different functional currencies for each operation (830-10-45-5, 830-10-55-6).", "Once determined, the functional currency is used consistently unless significant changes in economic facts clearly indicate a change; prior financial statements are never restated, and changes to/from the reporting currency follow 830-10-45-9 and 45-10 (830-10-45-7).", "Financial statements of a foreign entity in a highly inflationary economy (cumulative inflation of approximately 100% or more over three years) are remeasured as if the functional currency were the reporting currency (830-10-45-11 through 45-13); when the economy ceases to be highly inflationary, reporting currency amounts are translated at the current rate to establish the new functional currency basis for nonmonetary items (830-10-45-15).", "If books of record are not kept in the functional currency, remeasurement precedes translation: listed nonmonetary items (inventories at cost, PP&E and accumulated depreciation, prepaids, intangibles, goodwill, common stock, related cost of sales, depreciation, amortization) use historical rates, all other items use the current rate, and remeasurement gains and losses on nonfunctional-currency monetary items go to income (830-10-45-17 through 45-18)." ], "categories": [ "Foreign currency", "Subsequent measurement", "Consolidation", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "Exam questions almost always turn on identifying the functional currency first: get that wrong and every downstream answer (remeasurement gains in income vs. translation adjustments in OCI) is wrong. A common misunderstanding is conflating remeasurement (books not in functional currency; historical rates for nonmonetary items; gains/losses to earnings) with translation into the reporting currency (current rate; adjustment to OCI), and forgetting that a highly inflationary economy forces the reporting currency to be treated as the functional currency.", "related_topics": [ "830-20", "830-30", "830-230", "830-740", "740-10", "330-10" ], "key_concepts": [ "functional currency", "reporting currency", "remeasurement", "translation", "highly inflationary economy", "monetary and nonmonetary items", "historical exchange rate", "weighted average exchange rate" ] } ``` Source downloaded (UTC): 2026-09-10T01:46:09.742Z to 2026-09-10T01:46:09.742Z Record version: sha256:e0e0c15e065242feb2526ada0fef0c56eec336815055d80d7bff8185b557e93c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/830/10/#00-status) SEC content: no ##### [830-10-00-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:09.742Z to 2026-09-10T01:46:09.742Z Record version: sha256:17d4680196105e6819998a724c4e3a1f20ff1e4546d052f75adfe2d86b818d47 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
Net Realizable ValueAddedAccounting Standards Update No. 2015-1107/22/2015
Not-for-Profit EntityAddedAccounting Standards Update No. 2010-0701/28/2010
830-10-15-6AmendedAccounting Standards Update No. 2010-0701/28/2010
830-10-45-1AmendedAccounting Standards Update No. 2015-0101/09/2015
830-10-45-18AmendedAccounting Standards Update No. 2019-0404/25/2019
830-10-45-19SupersededAccounting Standards Update No. 2015-0101/09/2015
830-10-55-2AmendedMaintenance Update 2014-07 (PDF)03/17/2014
830-10-55-8AmendedAccounting Standards Update No. 2015-1107/22/2015
830-10-55-9AmendedAccounting Standards Update No. 2015-1107/22/2015
830-10-55-15AmendedAccounting Standards Update No. 2015-1107/22/2015
830-10-55-17SupersededAccounting Standards Update No. 2015-1107/22/2015
830-10-55-18AmendedAccounting Standards Update No. 2015-1107/22/2015
830-10-55-19AmendedAccounting Standards Update No. 2015-1107/22/2015
830-10-55-20 through 55-22
SupersededAccounting Standards Update No. 2015-1107/22/2015
Source downloaded (UTC): 2026-09-10T01:46:12.556Z to 2026-09-10T01:46:12.556Z Record version: sha256:9829791515c30237eec484fdbded88c0d2cf9b30c94f6961d17f8e4be985a329 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/830/10/#05-overview-and-background) SEC content: no ##### [830-10-05-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:12.556Z to 2026-09-10T01:46:12.556Z Record version: sha256:8341cf88e0938cf231b7538a2a18287c58e3498036cd6d4c2413b005bc1a15a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.") Matters Topic provides guidance on [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.") and [translation](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") of financial statements. This Topic includes the following Subtopics: 1. a Overall 2. b Foreign Currency Transactions 3. c Translation of Financial Statements 4. d Statement of Cash Flows 5. e Income Taxes. Source downloaded (UTC): 2026-09-10T01:46:15.893Z to 2026-09-10T01:46:15.893Z Record version: sha256:f66fe3d1b82e0499b08fab24f0e200588a9b20fe943643268c6fd83cb8715c84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/830/10/#10-objectives) SEC content: no #### Objectives of Translation ##### [830-10-10-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:15.893Z to 2026-09-10T01:46:15.893Z Record version: sha256:480dc3531985de0deeb9d06ac5ba8173fa6010bcf00aeaefff3a5b8c3d8c447c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statements are intended to present information in financial terms about the performance, financial position, and cash flows 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."). For this purpose, the financial statements of separate entities within a reporting entity, which may exist and operate in different economic and currency environments, are consolidated and presented as though they were the financial statements of a single reporting entity. Because it is not possible to combine, add, or subtract measurements expressed in different currencies, it is necessary to translate into a single [reporting currency](https://asc.understandingaccounting.org/glossary/r/#reporting-currency "The currency in which a reporting entity prepares its financial statements.") those assets, liabilities, revenues, expenses, gains, and losses that are measured or denominated in 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."). Paragraph [830-10-55-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-1) discusses the meaning of measurement in a foreign currency. ##### [830-10-10-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-10-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:15.893Z to 2026-09-10T01:46:15.893Z Record version: sha256:cf528b6a88c7785b6e6404986a2a85b474d3241f4bad42fa43ad9eb4d82610d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The unity presented by such [translation](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") does not alter the underlying significance of the results and relationships of the constituent parts of the reporting entity. It is only through the effective operation of its constituent parts that the reporting entity as a whole is able to achieve its purpose. Accordingly, the translation of the financial statements of each component entity of a reporting entity should accomplish both of the following objectives: 1. a Provide information that is generally compatible with the expected economic effects of a rate change on a reporting entity's cash flows and equity 2. b Reflect in consolidated statements the financial results and relationships of the individual consolidated entities as measured in their functional currencies in conformity with U.S. generally accepted accounting principles (GAAP). Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:3c1ec5b33c07afb8d63e8d9283b87c5348f8509236ea86acfd4844e6dd1d47dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/830/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [830-10-15-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:89a42b5c71ed899bf4e9d0097b454810a83f1e6249158bad11e4bae697052eee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of 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.") Matters Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Foreign Currency Matters Topic. #### Entities ##### [830-10-15-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:b823fef541e201200158b03554c0239f21c81c2b82a3e1b8b490631e33aef04c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Foreign Currency Matters Topic applies to all entities. #### Transactions ##### [830-10-15-3](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:ff9d8b71268412a733712021d0ff6938a6e535615b12f2a42aec58f0d7014cf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Foreign Currency Matters Topic applies to all [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.") in 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.") and all [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 by consolidation, combination, or the equity method of accounting. ##### [830-10-15-4](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:03986070dd9d24f30023afdd92e32ddcc28a477055203c3602f05ef9307ced72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For convenience, this Topic assumes that the reporting entity uses the U.S. dollar as its reporting currency. However, a currency other than the U.S. dollar may be the [reporting currency](https://asc.understandingaccounting.org/glossary/r/#reporting-currency "The currency in which a reporting entity prepares its financial statements.") in financial statements that are prepared in conformity with U.S. generally accepted accounting principles (GAAP). For example, 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.") may report in its [local currency](https://asc.understandingaccounting.org/glossary/l/#local-currency "The currency of a particular country being referred to.") in conformity with U.S. GAAP. If so, the requirements of this Topic apply. #### Other Considerations ##### [830-10-15-5](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:97b21a14349c2e75f4acdbcb8f718eb65fadf0e1eb05c4a54d603e1676e6bc10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [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.)") approach applies equally to [translation](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") of financial statements of foreign investees whether accounted for by the equity method or consolidated. Therefore, the foreign currency statements and the foreign currency transactions of an investee that are accounted for by the equity method shall be translated in conformity with the requirements of this Topic in applying the equity method. ##### [830-10-15-6](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:a9b7713c616135ba0b3f136fef4b0c1d8cb9b80c74c6a1503a54a8dec019f3dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The functional currency approach also applies to translation after a business combination or a combination accounted for by a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans."). See paragraph [830-30-45-11](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-11) for guidance. ##### [830-10-15-7](https://asc.understandingaccounting.org/asc/830/10/#830-10-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:18.142Z to 2026-09-10T01:46:18.142Z Record version: sha256:d9a38341d2dd5ec8708640a99f2457af3dff657cbac29bd9d099efc24b557e54 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Translation of financial statements from one currency to another for purposes other than consolidation, combination, or the equity method is beyond the scope of this Topic. For example, this Topic does not cover translation of the financial statements of a reporting entity from its reporting currency into another currency for the convenience of readers accustomed to that other currency. Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:15d325c16a58c999d79f458f48cc352753c3a0d78c2fe191a8d91e7a5cda7b71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/830/10/#45-other-presentation-matters) SEC content: no ##### [830-10-45-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:ba76e061375a634bb3de8c5b6d59dcd9447e3fa86490f6d2f9630b7f1847aadb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Section relates to 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.") determines the [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.)") 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.") (including of a foreign entity in a highly inflationary economy), remeasures the books of record (if necessary), and characterizes transaction gains and losses. The guidance is organized as follows: 1. a The functional currency 2. b The functional currency in highly inflationary economies 3. c Remeasurement of books of record into the functional currency 4. d [Subparagraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). #### The Functional Currency ##### [830-10-45-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:326e1cf0a2208fd0a99e0005c33ccdc9dfa6b4b8d1f0b7e770c577fc5f8fb548 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. 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. ##### [830-10-45-3](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:3f27e1d4f54182d558c46485e219268a7adc1d1d7fe10a341a1f7eee2b6c8ed3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It is neither possible nor desirable to provide unequivocal criteria to identify the functional currency of foreign entities under all possible facts and circumstances and still fulfill the objectives of [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."). Arbitrary rules that might dictate the identification of the functional currency in each case would accomplish a degree of superficial uniformity but, in the process, might diminish the relevance and reliability of the resulting information. ##### [830-10-45-4](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:7a76a300975f740e1165cfab32baf5f1742d3c66ff14dd37dd5f82aa3b3f8c1d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Multinational reporting entities may consist of entities operating in a number of economic environments and dealing in a number of foreign currencies. All foreign operations are not alike. To fulfill the objectives in paragraph [830-10-10-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-10-2), it is necessary to recognize at least two broad classes of foreign operations: 1. a In the first class are foreign operations that are relatively self-contained and integrated within a particular country or economic environment. The day-to-day operations are not dependent on the economic environment of the parent's functional currency; the foreign operation primarily generates and expends foreign currency. 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.") net cash flows that it generates may be reinvested or converted and distributed to the parent. For this class, the foreign currency is the functional currency. 2. b In the second class are foreign operations that are primarily a direct and integral component or extension of the parent entity's operations. Significant assets may be acquired from the parent entity or otherwise by expending dollars and, similarly, the sale of assets may generate dollars that are available to the parent. Financing is primarily by the parent or otherwise from dollar sources. In other words, the day-to-day operations are dependent on the economic environment of the parent's currency, and the changes in the foreign entity's individual assets and liabilities impact directly on the cash flows of the parent entity in the parent's currency. For this class, the dollar is the functional currency. ##### [830-10-45-5](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:6d1de0ce05c54b76f9d23d375a42f7fe0577a555c03f5a7f6e2289f59cfb6cd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity might have more than one distinct and separable operation, such as a division or branch, in which case each operation may be considered a separate entity. If those operations are conducted in different economic environments, they might have different functional currencies. ##### [830-10-45-6](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:73cf9bd6f15522944081ccbfc32b3990028b208bfee7fd210ea4f3259cdfa764 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The functional currency of an entity is, in principle, a matter of fact. In some cases, the facts will clearly identify the functional currency; in other cases they will not. For example, if a foreign entity conducts significant amounts of business in two or more currencies, the functional currency might not be clearly identifiable. In those instances, the economic facts and circumstances pertaining to a particular foreign operation shall be assessed in relation to the stated objectives for foreign currency translation (see paragraphs [830-10-10-1 through 10-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-10-1) ). Management's judgment will be required to determine the functional currency in which financial results and relationships are measured with the greatest degree of relevance and reliability. ##### [830-10-45-7](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:4933d5e9a7327dbcdf2b4ee5bc9e8d27841b5add461cabf0fa7de0997e98f57b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once the functional currency for a foreign entity is determined, that determination shall be used consistently unless significant changes in economic facts and circumstances indicate clearly that the [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.)") has changed. Previously issued financial statements shall not be restated for any change in the functional currency. ##### [830-10-45-8](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:b2428387d24e794e99401f6105022be204e09928b2f42604fb2f17544f9a1ad7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [250-10-45-1](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-1) for guidance on adoption or modification of an accounting principle necessitated by transactions or events that are clearly different in substance from those previously occurring. Paragraphs [830-10-45-15 through 45-16](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-15) discuss changes related to highly inflationary economies. ##### [830-10-45-9](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:d78b76cbde51ad9d4362ccdc0e31bb7ecab2ca303c8604cd20f0c5db18a4f8b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the functional currency changes from the [reporting currency](https://asc.understandingaccounting.org/glossary/r/#reporting-currency "The currency in which a reporting entity prepares its financial statements.") to a foreign currency, the adjustment attributable to current-rate translation of nonmonetary assets as of the date of the change shall be reported in other comprehensive income. ##### [830-10-45-10](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:a56b390af360565155a77ae99972f938456527f5570e9c0088aee1862a8ac8a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the functional currency changes from a foreign currency to the reporting currency, [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.") for prior periods shall not be removed from equity and the translated amounts for nonmonetary assets at the end of the prior period become the accounting basis for those assets in the period of the change and subsequent periods. This guidance shall be used also to account for a change in functional currency from the foreign currency to the reporting currency when an economy becomes highly inflationary. #### The Functional Currency in Highly Inflationary Economies ##### [830-10-45-11](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:9dd7d1583af0e214d094032979fd14b1f6bd5be7f46b093a8fd82ffc2db77cf5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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, the financial statements of those entities shall be remeasured into the reporting currency according to the requirements of paragraph [830-10-45-17](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-17). For the purposes of this requirement, a highly inflationary economy is one that has cumulative inflation of approximately 100 percent or more over a 3-year period. ##### [830-10-45-12](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:2bff4dd6bb509bf8793c9eab35aa73ffb41083e0cda120e1fadbbf3b41b22e85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of a highly inflationary economy must begin by calculating the cumulative inflation rate for the three years that precede the beginning of the reporting period, including interim reporting periods. If that calculation results in a cumulative inflation rate in excess of 100 percent, the economy shall be considered highly inflationary in all instances. However, if that calculation results in the cumulative rate being less than 100 percent, historical inflation rate trends (increasing or decreasing) and other pertinent economic factors should be considered to determine whether such information suggests that classification of the economy as highly inflationary is appropriate. Projections cannot be used to overcome the presumption that an economy is highly inflationary if the 3-year cumulative rate exceeds 100 percent. ##### [830-10-45-13](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:6550f6fba2d6eb20630669c6512cac9fa27135ecc8a8d8efa65689c15db770c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The definition of a highly inflationary economy is necessarily an arbitrary decision. In some instances, the trend of inflation might be as important as the absolute rate. The definition of a highly inflationary economy shall be applied with judgment. ##### [830-10-45-14](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:b6132ab3115f607ceb3393b2869b183fc503c7fc2dd2cf2cd205514b93457f58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 3 (see paragraph [830-10-55-23](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-23)) illustrates the application of this guidance. ##### [830-10-45-15](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:8627d83c5b4cd6f4a522761d4f14d5d11f4f3e45251be54131441546a3aece7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity's subsidiary's functional currency changes from the reporting currency to the [local currency](https://asc.understandingaccounting.org/glossary/l/#local-currency "The currency of a particular country being referred to.") because the economy ceases to be considered highly inflationary, the entity shall restate the functional currency accounting bases of nonmonetary assets and liabilities at the date of change as follows: 1. a The reporting currency amounts at the date of change shall be translated into the local currency at current exchange rates. 2. b The translated amounts shall become the new functional currency accounting basis for the nonmonetary assets and liabilities. Example 1 (see paragraph [830-10-55-12](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-12)) illustrates the application of this guidance. ##### [830-10-45-16](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:681b0b4868e5d07a07a779a6c0da5c0e59dc3bbc4dd1175ba4c0770422f471de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When the functional currency is the reporting currency, paragraph [740-10-25-3(f)](https://asc.understandingaccounting.org/asc/740/10/#740-10-25-3) prohibits recognition of deferred tax benefits that result from indexing for tax purposes assets and liabilities that are remeasured into the reporting currency using historical [exchange rates](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."). Thus, deferred tax benefits attributable to any such indexing that occurs after the change in functional currency to the reporting currency shall be recognized when realized on the tax return and not before. Deferred tax benefits that were recognized for indexing before the change in functional currency to the reporting currency are eliminated when the related indexed amounts shall be realized as deductions for tax purposes. #### Remeasurement of the Books of Record Into the Functional Currency ##### [830-10-45-17](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:36a09df505596b42ac813f2380c213884af8cdb0f1a1f54b05050339b05192ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity's books of record are not maintained in its functional currency, remeasurement into the functional currency is required. That remeasurement is required before translation into the reporting currency. If a foreign entity's functional currency is the reporting currency, remeasurement into the reporting currency obviates translation. The remeasurement of and subsequent accounting for transactions denominated in a currency other than the functional currency shall be in accordance with the requirements of Subtopic 830-20. The remeasurement process is intended to produce the same result as if the entity's books of record had been maintained in the functional currency. To accomplish that result, it is necessary to use historical exchange rates between the functional currency and another currency in the remeasurement process for certain accounts (the current rate will be used for all others), and this guidance identifies those accounts. To accomplish that result, it is also necessary to recognize currently in income all exchange gains and losses from remeasurement of monetary assets and liabilities that are not denominated in the functional currency (for example, assets and liabilities that are not denominated in dollars if the dollar is the functional currency). ##### [830-10-45-18](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:24bd930f9c09e41c127e5a3c535aa6468b400f45f2c07c5b1bd9fe95327502da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are common nonmonetary balance sheet items and related revenue, expense, gain, and loss accounts that shall be remeasured using historical rates to produce the same result in terms of the functional currency that would have occurred if those items had been initially recorded in the functional currency: 1. a Equity securities without readily determinable fair values accounted for in accordance with paragraph [321-10-35-2](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-2). The historical rate to be used shall be the exchange rate as of the later of the acquisition date or the most recent date on which the equity security was adjusted to fair value in accordance with paragraphs [321-10-35-2 through 35-3](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-2) , if applicable. 1. 1 [Subparagraph superseded by Accounting Standards Update No. 2019-04](https://asc.understandingaccounting.org/updates/asu-2019-04/). 2. 2 [Subparagraph superseded by Accounting Standards Update No. 2019-04](https://asc.understandingaccounting.org/updates/asu-2019-04/). 2. b Inventories carried at cost 3. c Prepaid expenses such as insurance, advertising, and rent 4. d Property, plant, and equipment 5. e Accumulated depreciation on property, plant, and equipment 6. f Patents, trademarks, licenses, and formulas 7. g Goodwill 8. h Other intangible assets 9. i Deferred charges and credits, except policy acquisition costs for life insurance companies 10. j Deferred income 11. k Common stock 12. l Preferred stock carried at issuance price 13. m Revenues and expenses related to nonmonetary items, for example: 1. 1 Cost of goods sold 2. 2 Depreciation of property, plant, and equipment 3. 3 Amortization of intangible items such as patents, licenses, and so forth 4. 4 Amortization of deferred charges or credits except policy acquisition costs for life insurance entities. ##### [830-10-45-19](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:22.095Z to 2026-09-10T01:46:22.095Z Record version: sha256:c584d28000a1d163adcf84a2b125f9da5e13d9241e928085b9cd8a03c894fb28 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): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:03fde39898e1b489daf8874e5ca9381aa2cf8fa1a1d52c84fe44cb01c18b0310 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/830/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [830-10-55-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:4b30b556559e904765bad1f06a7fba1fef03972cac4e7904f0ed034a5ceb1c45 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To measure in [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 to quantify an [attribute](https://asc.understandingaccounting.org/glossary/a/#attribute "The quantifiable characteristic of an item that is measured for accounting purposes. For example, historical cost and current cost are attributes of an asset.") of an item in a unit of currency other than the [reporting currency](https://asc.understandingaccounting.org/glossary/r/#reporting-currency "The currency in which a reporting entity prepares its financial statements."). Assets and liabilities are denominated in a foreign currency if their amounts are fixed in terms of that foreign currency regardless of [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.") changes. An asset or liability may be both measured and denominated in one currency, or it may be measured in one currency and denominated in another. ##### [830-10-55-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:b4c5e45f293dd33d8da47ae1874b0003d222a74416d7ac5d7ce773b45b379784 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, two foreign branches of a U.S. entity, one Swiss and one German, purchase identical assets on credit from a Swiss vendor at identical prices stated in Swiss francs. The German branch measures the cost (an attribute) of that asset in euros. Although the corresponding liability is also measured in euros, it remains denominated in Swiss francs since the liability must be settled in a specified number of Swiss francs. The Swiss branch measures the asset and liability in Swiss francs. Its liability is both measured and denominated in Swiss francs. Although assets and liabilities can be measured in various currencies, rights to receive or obligations to pay fixed amounts of a currency are, by definition, denominated in that currency. ##### [830-10-55-3](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:ab2d288a2b034d8670f387a0016956188674e5868e3c4ce6c1a768026c33f25f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides guidance for determination of the functional currency. The economic factors cited here, and possibly others, should be considered both individually and collectively when determining the functional currency. ##### [830-10-55-4](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:e3450f5db21361989e0ee7b9ab4dd3bc22af815c9de39a226f67ec20976af090 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This general guidance presents indicators of facts to be considered in identifying the functional currency. In those instances in which the indicators are mixed and the [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 not obvious, management's judgment will be required to determine the functional currency that most faithfully portrays the economic results of the entity's operations and thereby best achieves the objectives of [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.") set forth in paragraph [830-10-10-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-10-2). Management is in the best position to obtain the pertinent facts and weigh their relative importance in determining the functional currency for each operation. It is important to recognize that management's judgment is essential and paramount in this determination, provided only that it is not contradicted by the facts. ##### [830-10-55-5](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:10aa14681a3f4ad231abe6992c61db8ba129e2e9c27a88adbdd4edf53b6312a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following salient economic factors, and possibly others, should be considered both individually and collectively when determining the functional currency: 1. a Cash flow indicators, for example: 1. 1 Foreign currency. Cash flows related to the foreign entity's individual assets and liabilities are primarily in the foreign currency and do not directly affect the parent entity's cash flows. 2. 2 Parent's currency. Cash flows related to the foreign entity's individual assets and liabilities directly affect the parent's cash flows currently and are readily available for remittance to the parent entity. 2. b Sales price indicators, for example: 1. 1 Foreign currency. Sales prices for the foreign entity's products are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation. 2. 2 Parent's currency. Sales prices for the foreign entity's products are primarily responsive on a short-term basis to changes in exchange rates; for example, sales prices are determined more by worldwide competition or by international prices. 3. c Sales market indicators, for example: 1. 1 Foreign currency. There is an active local sales market for the foreign entity's products, although there also might be significant amounts of exports. 2. 2 Parent's currency. The sales market is mostly in the parent's country or sales contracts are denominated in the parent's currency. 4. d Expense indicators, for example: 1. 1 Foreign currency. Labor, materials, and other costs for the foreign entity's products or services are primarily local costs, even though there also might be imports from other countries. 2. 2 Parent's currency. Labor, materials, and other costs for the foreign entity's products or services continually are primarily costs for components obtained from the country in which the parent entity is located. 5. e Financing indicators, for example: 1. 1 Foreign currency. Financing is primarily denominated in foreign currency, and funds generated by the foreign entity's operations are sufficient to service existing and normally expected debt obligations. 2. 2 Parent's Currency—Financing is primarily from the parent or other dollar-denominated obligations, or funds generated by the foreign entity's operations are not sufficient to service existing and normally expected debt obligations without the infusion of additional funds from the parent entity. Infusion of additional funds from the parent entity for expansion is not a factor, provided funds generated by the foreign entity's expanded operations are expected to be sufficient to service that additional financing. 6. f Intra-entity transactions and arrangements indicators, for example: 1. 1 Foreign currency. There is a low volume of intra-entity transactions and there is not an extensive interrelationship between the operations of the [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.") and the parent entity. However, the foreign entity's operations may rely on the parent's or affiliates' competitive advantages, such as patents and trademarks. 2. 2 Parent's currency. There is a high volume of intra-entity transactions and there is an extensive interrelationship between the operations of the foreign entity and the parent entity. Additionally, the parent's currency generally would be the functional currency if the foreign entity is a device or shell corporation for holding investments, obligations, intangible assets, and so forth, that could readily be carried on the parent's or an affiliate's books. ##### [830-10-55-6](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:fd4d14a85a9499f3522fe5572bc023308230d6bce05451290139dcc51a222c62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some instances, a foreign entity might have more than one distinct and separable operation. For example, a foreign entity might have one operation that sells parent-entity-produced products and another operation that manufactures and sells foreign-entity-produced products. If they are conducted in different economic environments, those two operations might have different functional currencies. Similarly, a single subsidiary of a financial institution might have relatively self-contained and integrated operations in each of several different countries. In those circumstances, each operation may be considered to be an entity as that term is used in this Subtopic, and, based on the facts and circumstances, each operation might have a different functional currency. ##### [830-10-55-7](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:f423eafcff3d5ca8e25b25236960e740cb068fd1b09dd64e5039ff4a319b2866 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foreign investments that are consolidated or accounted for by the equity method are controlled by or subject to significant influence by the parent entity. Likewise, the parent's currency is often used for measurements, assessments, evaluations, projections, and so forth, pertaining to foreign investments as part of the management decision-making process. Such management control, decisions, and resultant actions may reflect, indicate, or create economic facts and circumstances. However, the exercise of significant management control and the use of the parent's currency for decision-making purposes do not determine, per se, that the parent's currency is the functional currency for foreign operations. ##### [830-10-55-8](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:7ba813c13db8ef195ff60736993fe9f8ba3c57d70c03c448d290332230146fef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance on the subsequent measurement of inventory in Subtopic 330-10 requires special application when the books of record are not kept in the functional currency. Inventories carried at cost in the books of record in another currency should be first remeasured to cost in the functional currency using historical exchange rates. Then, historical cost in the functional currency should be evaluated for impairment under the subsequent measurement guidance using the functional currency. Application of the subsequent measurement guidance in functional currency may require a write-down in the functional currency statements even though no write-down has been made in the books of record maintained in another currency. Likewise, a write-down in the books of record may need to be reversed if the application of the subsequent measurement guidance in the functional currency does not require a write-down. If inventory has been written down in the functional currency statements, that functional currency amount shall continue to be the carrying amount in the functional currency financial statements until the inventory is sold or a further write-down is necessary. An asset other than inventory may sometimes be written down from historical cost. Although different measurement guidance may be used to determine that write-down, the approach described in this paragraph might be appropriate. That is, a write-down may be required in the functional currency statements even though not required in the books of record, and a write-down in the books of record may need to be reversed before remeasurement to prevent the remeasured amount from exceeding functional currency historical cost. ##### [830-10-55-9](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:a9a54c787a835fd80c16ba2535b868b2a68f10e60f7d175071b726ec86b3d1ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Literal application of the subsequent measurement guidance in Subtopic 330-10 may require an inventory write-down in functional currency financial statements for locally acquired inventory if the value of the currency in which the books of record are maintained has declined in relation to the functional currency between the date the inventory was acquired and the date of the balance sheet. However, such a write-down may not be necessary, for example, for inventory measured using the first-in, first out (FIFO) methodology, if the [net realizable value](https://asc.understandingaccounting.org/glossary/n/#net-realizable-value "Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.") expressed in the currency in which the books of record are maintained has increased sufficiently so that net realizable value exceeds historical cost as measured in functional currency. Cases A and B in Example 2 (see paragraphs [830-10-55-15 through 55-16](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-15) and [830-10-55-18 through 55-19](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-18) ) illustrate this situation. This paragraph is not intended to preclude recognition of gains in a later interim period to the extent of inventory losses recognized from net realizable value declines in earlier interim periods if losses on the same inventory are recovered in the same year, as provided by paragraph [270-10-45-6(c)](https://asc.understandingaccounting.org/asc/270/10/#270-10-45-6). An inventory write-down also may be required for imported inventory. ##### [830-10-55-10](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:1286b26be4615f3d2fdd07b19063b3d7d1bfc99121687e2af99940e96ef5cdcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Literal application of the standards in this Subtopic might require a degree of detail in record keeping and computations that could be burdensome as well as unnecessary to produce reasonable approximations of the results. Accordingly, it is acceptable to use averages or other methods of approximation. For example, because [translation](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") at the exchange rates at the dates the numerous revenues, expenses, gains, and losses are recognized is generally impractical, an appropriately weighted average exchange rate for the period may be used to translate those elements. Likewise, the use of other time- and effort-saving methods to approximate the results of detailed calculations is permitted. ##### [830-10-55-11](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:45e04c2f91525723392649183d9923c8aac6c77eb448ccf820d049642494f4ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Average rates used shall be appropriately weighted by the volume of functional currency transactions occurring during the accounting period. For example, to translate revenue and expense accounts for an annual period, individual revenue and expense accounts for each quarter or month may be translated at that quarter's or that month's average rate. The translated amounts for each quarter or month should then be combined for the annual totals. #### Illustrations ##### [830-10-55-12](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:8180eb7c46bae7faa6d7a40764ad999a8457148e17ae687f3dca28adad46f484 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of paragraph [830-10-45-15](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-15). ##### [830-10-55-13](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:66dd4614642e46b3b0c9ffee40c4280d4813d87d86d102fab704f4bbca97f3c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A foreign subsidiary of a U.S. entity operating in a highly inflationary economy purchased equipment with a 10-year useful life for 100,000 [local currency](https://asc.understandingaccounting.org/glossary/l/#local-currency "The currency of a particular country being referred to.") (LC) on January 1, 19X1. The exchange rate on the purchase date was LC 10 to USD 1, so the U.S. dollar equivalent cost was USD 10,000. On December 31, 19X5, the equipment has a net book value on the subsidiary's local books of LC 50,000 (original cost of LC 100,000 less accumulated depreciation of LC 50,000) and the 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.") is LC 75 to the U.S. dollar. In the U.S. parent's financial statements, annual depreciation expense of USD 1,000 has been reported for each of the past 5 years, and at December 31, 19X5, the equipment is reported at USD 5,000 (foreign currency basis measured at the historical exchange rate). ##### [830-10-55-14](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:c1e9465fc6a124eeedf5bca91d8fcd8d43efbe8ed2f3b9b25aad21b94193b1f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As of the beginning of 19X6, the economy of the subsidiary ceases to be considered highly inflationary. Under paragraph [830-10-45-15](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-15), a new functional currency accounting basis for the equipment would be established as of January 1, 19X6, by translating the [reporting currency](https://asc.understandingaccounting.org/glossary/r/#reporting-currency "The currency in which a reporting entity prepares its financial statements.") amount of USD 5,000 into the functional currency at the current exchange rate of LC 75 to the U.S. dollar. The new functional currency accounting basis at the date of change would be LC 375,000. For U.S. reporting purposes, pursuant to this Subtopic, the new functional currency accounting basis and related depreciation would subsequently be translated into U.S. dollars at current and average exchange rates, respectively. ##### [830-10-55-15](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:9f8dd5edcbae96ded60a22714974b90a84aa71277805fac929b06cdacce51e46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate this Section's implementation guidance on remeasurement of inventory that is measured using first-in, first-out (FIFO) and is not recorded in the functional currency (see paragraphs [830-10-45-18](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-18) and [830-10-55-8 through 55-9](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-8) ): 1. a Historical cost in functional currency exceeds net realizable value in functional currency (Case A) 1. 1 [Subparagraph superseded by Accounting Standards Update No. 2015-11](https://asc.understandingaccounting.org/updates/asu-2015-11/). 2. 2 [Subparagraph superseded by Accounting Standards Update No. 2015-11](https://asc.understandingaccounting.org/updates/asu-2015-11/). 2. b Net realizable value in functional currency exceeds historical cost in functional currency (Case B). ##### [830-10-55-16](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:261d669ea32540a94e237be2fdd9a9276d1ca9461e2a92b178102d82d414a1cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A and B share all of the following assumptions: 1. a BR is the currency in which the books of record are maintained. 2. b FC is the functional currency. 3. c When the rate is BR 1 = FC 2.40, a foreign subsidiary of a U.S. entity purchases a unit of inventory at a cost of BR 500 (measured in functional currency, FC 1,200). 4. d At the foreign subsidiary's balance sheet date, the current rate is BR 1 = FC 2.00. ##### [830-10-55-17](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:c28a13ea8c138f5bd127002c967109ca5cf6d689d37886e86ae432a2c32b8224 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-11](https://asc.understandingaccounting.org/updates/asu-2015-11/). ##### [830-10-55-18](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:c113487c80ca7a3486d8fe531e95e4cff29f63f5a2f1bae71ec61e941f431121 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume the net realizable value of the unit of inventory is BR 560 (measured in functional currency, FC 1,120). Because net realizable value as measured in the functional currency (FC 1,120) is less than historical cost as measured in the functional currency (FC 1,200), an inventory write-down of FC 80 is required in the functional currency financial statements. ##### [830-10-55-19](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:559e4d3d8f5f72b75fb5fa23ae65fda2c3d0aa8f6af3092a82f0dafa4e3efcc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume the net realizable value at the foreign subsidiary's balance sheet date is BR 620. Because net realizable value as measured in the functional currency (BR 620 x FC 2.00 = FC 1,240) exceeds historical cost as measured in the functional currency (BR 500 x FC 2.40 = FC 1,200), an inventory write-down is not required in the functional currency financial statements. ##### [830-10-55-20](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:d89a6e3c530e6469feefe1da9fd54a61ccf88fc0e4aaf61b6025319311f7f43a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-11](https://asc.understandingaccounting.org/updates/asu-2015-11/). ##### [830-10-55-21](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:04b245b7f8a2f4a806d5e9059f9ed8234853b3c95d357352c927da6771227643 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-11](https://asc.understandingaccounting.org/updates/asu-2015-11/). ##### [830-10-55-22](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:0cd8503bcee0660b5400f174a1f6bd02c64dbf9adbd11c19104dfab372d2277f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-11](https://asc.understandingaccounting.org/updates/asu-2015-11/). ##### [830-10-55-23](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:5a03234234ca03623b4c5ec661144e60f907db260636e789b18e9cc6cab7f6d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the application of paragraph [830-10-45-12](https://asc.understandingaccounting.org/asc/830/10/#830-10-45-12): 1. a The cumulative 3-year inflation rate exceeds 100 percent (Case A). 2. b The cumulative 3-year inflation rate drops below 100 percent but no evidence suggests that drop is other than temporary (Case B). 3. c The cumulative 3-year inflation rate drops below 100 percent after having spiked above 100 percent (Case C). ##### [830-10-55-24](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:98e084bf1082f3ed8368cafd568301ed50eed6a80a3cbb86a0ca4e894381cb78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Country A's economy at the beginning of 19X9 continues to be classified as highly inflationary because the cumulative 3-year rate is in excess of 100 percent (see the following table). The recent trend of declining inflation rates should not be extrapolated to project future rates to overcome the classification that results from the calculation. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-EDD6B085-D893-4CB5-B65F-06DE4339DA3A-low.gif) Fiscal Year X1 X2 X3 X4 X5 X6 X7 X8 Annual inflation rate 9% 8% 12% 17% 33% 52% 30% 15% Cumulative three-year rate (a) 32% 42% 74% 137% 163% 127% (a) Amounts are calculated as a compounded three-year inflation rate. ##### [830-10-55-25](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:391d022da41eec3d09f40fc282a7768b2e6c384e5e476571732006e14efa7eb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Country B's economy at the beginning of 19X9 should continue to be classified as highly inflationary even though the cumulative 3-year rate is less than 100 percent (see the following table) because there is no evidence to suggest that the drop below the 100 percent cumulative rate is other than temporary and the annual rate of inflation during the preceding 8 years has been high. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9EAFEB43-1449-4E2C-A3CF-99B7F6AE1FA4-low.gif) Fiscal Year X1 X2 X3 X4 X5 X6 X7 X8 Annual inflation rate 15% 28% 46% 41% 35% 29% 23% 21% Cumulative three-year rate (a) 115% 164% 178% 146% 114% 92% (a) Amounts are calculated as a compounded three-year inflation rate. ##### [830-10-55-26](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:26.217Z to 2026-09-10T01:46:26.217Z Record version: sha256:3c8be43975b6e76d847e26ff5efd4eb6703a0dd105364c66e1b17c8e63051c13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Country C's economy at the beginning of 19X9 should no longer be classified as highly inflationary because the cumulative 3-year rate is less than 100 percent (see the following table) and the historical inflation rates suggest that the prior classification resulted from an isolated spike in the annual inflation rate. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-900780E7-FA32-4899-8D27-C1D97250FA39-low.gif) Fiscal Year X1 X2 X3 X4 X5 X6 X7 X8 Annual inflation rate 5% 6% 4% 7% 12% 55% 18% 6% Cumulative three-year rate (a) 16% 18% 25% 86% 105% 94% (a) Amounts are calculated as a compounded three-year inflation rate. Source downloaded (UTC): 2026-09-10T01:46:28.604Z to 2026-09-10T01:46:28.604Z Record version: sha256:49a3abff357ac2b11830f19ae20ef0d3512bd6533815c4ead0e49551200fbaf2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/830/10/#60-relationships) SEC content: no #### Income Taxes ##### [830-10-60-1](https://asc.understandingaccounting.org/asc/830/10/#830-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:28.604Z to 2026-09-10T01:46:28.604Z Record version: sha256:39a564da3257ec6b0db2137846e1df40040fbd759d0bbf06b7dd774cf87bed94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the tax effects of translation adjustments, see paragraph [740-20-45-11(b)](https://asc.understandingaccounting.org/asc/740/20/#740-20-45-11). ##### [830-10-60-2](https://asc.understandingaccounting.org/asc/830/10/#830-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:28.604Z to 2026-09-10T01:46:28.604Z Record version: sha256:af44383e191ae6743073e0a7430e9f4c502cb322bb0895b3c09c8fcd288583bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on an increase in the tax basis of assets because of indexing when the local currency is the functional currency, see paragraph [740-10-25-20(g)](https://asc.understandingaccounting.org/asc/740/10/#740-10-25-20). Source downloaded (UTC): 2026-09-10T01:46:33.561Z to 2026-09-10T01:47:07.110Z Record version: sha256:c4ef6da561cc84b28116e53932db437ba3b9c405796c8794ad3fec18b48a02b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20: Foreign Currency Matters — Foreign Currency Transactions ### Machine-generated study aids ```json { "summary": "ASC 830-20 governs how an entity accounts for transactions denominated in a currency other than its functional currency (foreign currency transactions). At the transaction date, each asset, liability, revenue, expense, gain, or loss is recorded and measured in the functional currency using the exchange rate in effect at that date (830-20-25-1; 830-20-30-1); thereafter, balances denominated in a foreign currency are remeasured at each balance sheet date at the current rate (830-20-35-2), with the resulting transaction gains and losses generally included in net income. Narrow exceptions—economic hedges of a net investment in a foreign entity and long-term-investment-nature intra-entity balances—are reported like translation adjustments in other comprehensive income (830-20-35-3).", "key_points": [ "A foreign currency transaction is one denominated in a currency other than the recording entity's functional currency; for a non-dollar functional currency entity, even a dollar-denominated transaction is a foreign currency transaction (830-20-05-2).", "Initial measurement uses the exchange rate in effect at the transaction date at which the particular transaction could be settled (830-20-30-1; 830-20-30-3); if exchangeability is temporarily lacking, use the first subsequent rate at which exchanges could be made (830-20-30-2).", "At each balance sheet date, foreign-currency-denominated recorded balances are adjusted to the current rate, and the resulting transaction gain or loss is generally included in net income for the period in which the rate changes (830-20-35-1; 830-20-35-2).", "Exceptions reported in the same manner as translation adjustments (OCI): transactions designated as, and effective as, economic hedges of a net investment in a foreign entity from the designation date, and intra-entity transactions of a long-term-investment nature where settlement is not planned or anticipated in the foreseeable future (830-20-35-3; 830-20-35-4).", "Gain or loss realized on settlement (measured from the transaction date or most recent intervening balance sheet date, whichever is later) is included in net income, subject to the 830-20-35-3 exceptions (830-20-40-1).", "Financial statements are not adjusted for rate changes occurring after the balance sheet date, but disclosure of such a rate change and its effect on unsettled balances may be necessary if significant (830-20-35-8; 830-20-50-2).", "The aggregate transaction gain or loss included in net income must be presented in the financial statements or disclosed in the notes (830-20-45-1; 830-20-50-1); derivative instruments are scoped out and follow Topic 815 (830-20-15-2)." ], "categories": [ "Foreign currency", "Subsequent measurement", "Initial measurement", "Disclosure" ], "audience_level": "intermediate", "student_note": "Exam questions hinge on the split between P&L and OCI: ordinary receivables/payables denominated in a foreign currency are remeasured through net income, while only net investment hedges and long-term-investment intra-entity balances go to OCI. A common misunderstanding is confusing remeasurement of transactions (830-20, gains/losses to income) with translation of a foreign entity's financial statements (830-30, adjustments to CTA in OCI).", "related_topics": [ "830-10", "830-30", "830-740", "815-35", "815-20", "740-10" ], "key_concepts": [ "foreign currency transaction", "functional currency", "remeasurement", "transaction gain or loss", "current exchange rate", "net investment hedge", "intra-entity long-term-investment balances", "translation adjustment" ] } ``` Source downloaded (UTC): 2026-09-10T01:46:33.561Z to 2026-09-10T01:46:33.561Z Record version: sha256:19030419e8e0bfb434b5960b31d13d093d90ffde320d1b13b7f144402f54c94e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/830/20/#00-status) SEC content: no ##### [830-20-00-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:33.561Z to 2026-09-10T01:46:33.561Z Record version: sha256:8dbec581e3b3857b3e307dc545c58de28ccc5f49e924dd9ae5247671005e1e7a 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
830-20-05-3AmendedAccounting Standards Update No. 2020-1010/29/2020
830-20-35-6AmendedAccounting Standards Update No. 2016-1306/16/2016
830-20-35-7SupersededAccounting Standards Update No. 2016-1306/16/2016
830-20-35-7AAddedAccounting Standards Update No. 2018-0302/28/2018
830-20-45-1AmendedMaintenance Update 2020-18 (PDF)11/25/2020
830-20-45-1AmendedAccounting Standards Update No. 2020-1010/29/2020
830-20-45-4SupersededAccounting Standards Update No. 2015-0101/09/2015
830-20-45-5AmendedAccounting Standards Update No. 2015-0101/09/2015
830-20-50-1AmendedAccounting Standards Update No. 2024-0311/04/2024
830-20-50-1AmendedAccounting Standards Update No. 2020-1010/29/2020
Source downloaded (UTC): 2026-09-10T01:46:36.938Z to 2026-09-10T01:46:36.938Z Record version: sha256:398f64d9f74dd99d1490b68e0846f01492a2950acb98760a7fe10319c30858fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/830/20/#05-overview-and-background) SEC content: no ##### [830-20-05-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:36.938Z to 2026-09-10T01:46:36.938Z Record version: sha256:ee787f8e74b8e08b83695fee84b465a698b4a3bf2e8460ede9877a4c4962ac7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic establishes standards of financial accounting and reporting for [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.") in 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."). ##### [830-20-05-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:36.938Z to 2026-09-10T01:46:36.938Z Record version: sha256:9f2440a6a113545004454616f576844595c55c55a2223386e15ef125e99981af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of [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.") that will be received or paid. Examples include a sale denominated in Swiss francs, a Swiss franc loan, and the holding of Swiss francs by an entity whose [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 the dollar. Likewise, a Swiss franc denominated transaction by a German entity or other entity whose functional currency is not the Swiss franc is a foreign currency transaction. For any entity whose functional currency is not the dollar, a dollar-denominated transaction is also a foreign currency transaction. ##### [830-20-05-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:36.938Z to 2026-09-10T01:46:36.938Z Record version: sha256:3d99792b80cee1e6b19bc2a56daf0f2d7e000c3ce5454de3441b4064b4a6a63d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If taxable exchange gains or tax-deductible exchange losses resulting from an entity's foreign currency transactions are included in net income in a different period for financial statement purposes from that for tax purposes, a deferred tax liability or deferred tax asset should be recognized as required under Topic 740. Source downloaded (UTC): 2026-09-10T01:46:40.791Z to 2026-09-10T01:46:40.791Z Record version: sha256:02021522374bb26d9cd5c2f49f931292294df5d312a1686f3a1e8f4a5794094c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/830/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [830-20-15-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:40.791Z to 2026-09-10T01:46:40.791Z Record version: sha256:102164f1e58ce344e3a24d60da6762cead578de8ff2725e73505684b5b943a58 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, with specific transaction exceptions noted below. #### Transactions ##### [830-20-15-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:40.791Z to 2026-09-10T01:46:40.791Z Record version: sha256:93c9c1601e524078c132882243e0d670a6bf3ffff936b68fcf85c746e42c82b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all [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.") with the exception of the following: 1. a Derivative instruments, for guidance see Topic 815. Source downloaded (UTC): 2026-09-10T01:46:45.901Z to 2026-09-10T01:46:45.901Z Record version: sha256:2a1bd862060aff1645c28af1aaaab25d4e53820330a8d8fe26105affe9f01d0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/830/20/#25-recognition) SEC content: no ##### [830-20-25-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:45.901Z to 2026-09-10T01:46:45.901Z Record version: sha256:51ad8d940f70e4cdc1f852f8ed35de9532b0b49f1dc3f2382a75203a9ce6d0aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date a [foreign currency transaction](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.") is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be recorded in the [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.)") of the recording entity. ##### [830-20-25-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:45.901Z to 2026-09-10T01:46:45.901Z Record version: sha256:10bfc5419edcb141fb0ff7d777211138c6ce62bd8fad7b2bbb2db2904ca23cff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [830-10-55-3 through 55-7](https://asc.understandingaccounting.org/asc/830/10/#830-10-55-3) provide guidance on the determination of a reporting entity's functional currency. Paragraph [830-10-45-17](https://asc.understandingaccounting.org/asc/830/10/#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](https://asc.understandingaccounting.org/glossary/t/#translation "See Foreign Currency Translation.") into the reporting currency. That paragraph provides further guidance on remeasurement of books and records. Source downloaded (UTC): 2026-09-10T01:46:49.634Z to 2026-09-10T01:46:49.634Z Record version: sha256:1a15cccdbc620bffa63332b96c49857444e672a7ae4449cbe56bd7130608f7d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/830/20/#30-initial-measurement) SEC content: no ##### [830-20-30-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:49.634Z to 2026-09-10T01:46:49.634Z Record version: sha256:9d80aebcd3513f6652e0d9c903067c5db27e50c673239dfdbec611d5779845a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date a [foreign currency transaction](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.") is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured initially in the [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.)") of the recording entity by use of 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.") in effect at that date. #### Exchange Rates ##### [830-20-30-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:49.634Z to 2026-09-10T01:46:49.634Z Record version: sha256:f4c9ad1d3e6c4ebaebbc302976f80caa1414d02f1ac022892b141d99ac12f476 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](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.") shall be carefully considered. ##### [830-20-30-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:49.634Z to 2026-09-10T01:46:49.634Z Record version: sha256:6843496e0bb138dc31709164e9a9c5747da213564713f3ec33b46d42c677f015 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [830-20-30-4](https://asc.understandingaccounting.org/asc/830/20/#830-20-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:49.634Z to 2026-09-10T01:46:49.634Z Record version: sha256:7a54704a894b574f7de22cc4b277a3e8637c1ba07612e18841557a9c66b7540e 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) discuss the use of averages or other methods of approximation. Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:5ee0cb6828813e7cea5d14b39f0d97e4f3938576ffd81d66ae1ff3b9afb36b5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/830/20/#35-subsequent-measurement) SEC content: no #### Transaction Gains and Losses ##### [830-20-35-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:a6f4e9889f8afe18fa668de308cc91dc4b457c4e8a845d7085542a07a08f2d70 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A change in exchange rates between the [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.)") and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is a foreign currency [transaction gain or loss](https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss "Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions.") that generally shall be included in determining net income for the period in which 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.") changes. ##### [830-20-35-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:19502648dc9fa67c0507f1f827d808ef46f2a5a2f349e008ef906fbd10a54626 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [830-20-30-2 through 30-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-30-2) provide more information about exchange rates. ##### [830-20-35-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:ce7fd1018f5b3f38d36e57a6d9296e3e3966d9e5b5d04af5f14d09385dc874da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gains and losses on the following [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.") shall not be included in determining net income but shall be reported in the same manner as [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."): 1. a Foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity, commencing as of the designation date (see Subtopic 815-35) 2. b Intra-entity foreign currency transactions that are of a long-term-investment nature (that is, settlement is not planned or anticipated in the foreseeable future), when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting entity's financial statements. ##### [830-20-35-4](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:4bac6d20dd9aa2f47f0d15c735124db5dc8cc00fec0629e7a229e8dd068d1eba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [830-20-35-5](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:ab146c60b48e4aba7b722ceccb6edcc3c00aca3f1aa857985b921898f277ef61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting for a gain or loss on a foreign currency transaction that is intended to hedge an identifiable foreign currency commitment (for example, an agreement to purchase or sell equipment) is addressed by paragraph [815-20-25-58](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-58). ##### [830-20-35-6](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:88e52b1b5ce19dbc08688213c728a61424a47c15ad22c5c9b4bbeb815cd32d8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [320-10-35-36](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-36) requires that the entire change in the fair value of foreign-currency-denominated available-for-sale debt securities not related to the allowance for credit losses be reported in other comprehensive income. See Subtopic 326-30 for guidance on measuring credit losses for available-for-sale debt securities. ##### [830-20-35-7](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:2115c52b65d1a9c5c695e24d62acae9ee6755c64ada0802111e5bd1da9fcdba5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [830-20-35-7A](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-7A) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:a56f584ea8742cbebed9949e94040c4641db80e99b4cb97aa4e6d99aa6d6ca7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [825-10-45-5A](https://asc.understandingaccounting.org/asc/825/10/#825-10-45-5A) requires that for a financial liability for which the fair value option is elected, the change in the liability's fair value resulting from changes in instrument-specific credit risk shall be presented separately in other comprehensive income from other changes in the liability's fair value presented in current earnings. The component of the change in fair value of the liability resulting from changes in instrument-specific credit risk shall first be measured in the liability's currency of denomination, and then the cumulative amount shall be adjusted to reflect the current exchange rate in accordance with paragraph [830-20-35-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-2). The remeasurement of the component of the change in fair value of the liability resulting from the cumulative changes in instrument-specific credit risk shall be presented in accumulated other comprehensive income. ##### [830-20-35-8](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:52.717Z to 2026-09-10T01:46:52.717Z Record version: sha256:7b073caa80faa929ddfcb567a86fbb0a6b7fd2a1b3fe8317236161ba4ed39b19 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. Source downloaded (UTC): 2026-09-10T01:46:56.233Z to 2026-09-10T01:46:56.233Z Record version: sha256:95a38f55225a9440fc1da9190f0663a77eba2c99a9f6b41ee9453a1e04226ea2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/830/20/#40-derecognition) SEC content: no ##### [830-20-40-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:56.233Z to 2026-09-10T01:46:56.233Z Record version: sha256:146ef155df4257618bfcfa46050f7ac428fb65700a7bfc463cf73337c5d4fd56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [transaction gain or loss](https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss "Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions.") (measured from 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 the most recent intervening balance sheet date, whichever is later) realized upon settlement of a [foreign currency transaction](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.") generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses are set forth in paragraph [830-20-35-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-3) and pertain to certain intra-entity transactions and to transactions that are designated as, and effective as, economic hedges of net investments. Source downloaded (UTC): 2026-09-10T01:46:58.403Z to 2026-09-10T01:46:58.403Z Record version: sha256:ec255cc6c84b46c21a68062997d1021c0ccf397365930aa54d841dd3b385fb49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/830/20/#45-other-presentation-matters) SEC content: no #### Income Statement Presentation ##### [830-20-45-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:58.403Z to 2026-09-10T01:46:58.403Z Record version: sha256:dd7df1fe7ca1443c824ecded86905b91d6affdc809c06e317df4d81dac040d96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The aggregate [transaction gain or loss](https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss "Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions.") included in determining net income for the period shall be presented in the financial statements or disclosed in the notes thereto (see paragraph [830-20-50-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-50-1)). ##### [830-20-45-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:58.403Z to 2026-09-10T01:46:58.403Z Record version: sha256:6b6ed1ee7a03495afe38e9b50a879be02725b34207961fb70bd53d738985c41e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [830-20-45-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:58.403Z to 2026-09-10T01:46:58.403Z Record version: sha256:d8ca3b2170949de54b544f11b1c618c9de36c551b5058b9506d1c802178de908 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When the [reporting currency](https://asc.understandingaccounting.org/glossary/r/#reporting-currency "The currency in which a reporting entity prepares its financial statements.") (not 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 functional currency, remeasurement of a reporting entity's deferred foreign tax liability or asset after a change in 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.") will result in a transaction gain or loss that is recognized currently in determining net income. The preceding paragraph requires disclosure of the aggregate transaction gain or loss included in determining net income but does not specify how to display that transaction gain or loss or its components for financial reporting. See paragraph [830-740-45-1](https://asc.understandingaccounting.org/asc/740/830/#740-830-45-1) for further guidance. ##### [830-20-45-4](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:58.403Z to 2026-09-10T01:46:58.403Z Record version: sha256:c313b7c019021be23e6bc24c25cc43abe456f3b0cad116f5368c9f77d763c0fb 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/). #### Reporting Other Comprehensive Income ##### [830-20-45-5](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:46:58.403Z to 2026-09-10T01:46:58.403Z Record version: sha256:de44941606d27856b23fddc8e944ed975a511bd5dd86f7707e62f8077459fa9a 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. Some transaction gains and losses are reported in other comprehensive income. Any income taxes related to those transaction gains and losses shall be allocated to other comprehensive income. Source downloaded (UTC): 2026-09-10T01:47:02.159Z to 2026-09-10T01:47:02.159Z Record version: sha256:d9893f4e13ec796ce631300dd6afd84344c014a867e5e8b2daac8b24e665378d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/830/20/#50-disclosure) SEC content: no #### Aggregate Transaction Gain or Loss ##### [830-20-50-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-50-1) Pending content: yes Source downloaded (UTC): 2026-09-10T01:47:02.159Z to 2026-09-10T01:47:02.159Z Record version: sha256:4ca69ca97785361ae0637bbd2d3e9697d768cabf48d6106c3e79dc57e5e5947b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If not presented in the financial statements as discussed in paragraph [830-20-45-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-1), the aggregate [transaction gain or loss](https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss "Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions.") included in determining net income for the period shall be disclosed in notes to financial statements. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)If not presented in the financial statements as discussed in paragraph [830-20-45-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-45-1), the aggregate [transaction gain or loss](https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss "Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions.") included in determining net income for the period shall be disclosed in notes to financial statements. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. #### Subsequent Rate Changes ##### [830-20-50-2](https://asc.understandingaccounting.org/asc/830/20/#830-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:02.159Z to 2026-09-10T01:47:02.159Z Record version: sha256:d06db085d8ab49f386abe2ea745cbda2c0e0202be5131f8693b43f2f643c7dc0 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 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. If disclosed, the disclosure shall include consideration of changes in unsettled transactions from the date of the financial statements to the date the rate changed. In some cases it may not be practicable to determine these changes; if so, that fact shall be stated. #### Effects of Rate Changes on Results of Operations ##### [830-20-50-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:02.159Z to 2026-09-10T01:47:02.159Z Record version: sha256:3c4c81385c336e2312cf6d299146fa2fe6526ddba61fa0a26802771541b0643d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. 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. 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. Source downloaded (UTC): 2026-09-10T01:47:48.746Z to 2026-09-10T01:48:09.816Z Record version: sha256:ec2c846e11ab802d98ff6df8bbd3df252aca6de09e64693dcc58fc3bdd66407f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946: Foreign Currency Matters — Financial Services—Investment Companies ### Machine-generated study aids ```json { "summary": "This Subtopic tells investment companies how to compute and report foreign currency transaction gains and losses on foreign-currency-denominated securities, cash, forward contracts, receivables/payables, income, and expenses. Ongoing revaluation of unsettled foreign-currency items produces unrealized foreign currency gain or loss, which is reclassified to realized gain or loss upon settlement (830-946-45-1). Critically, a fund is permitted—but not required—to separately isolate the foreign currency component of realized and unrealized gains and losses on investments, and it must disclose whichever practice it follows (830-946-45-4; 830-946-50-1).", "key_points": [ "Revaluation of investments and unsettled foreign currency receivables/payables is unrealized foreign currency gain or loss; on actual cash settlement it becomes realized gain or loss (830-946-45-1, 45-23).", "Separate reporting of the foreign currency portion of changes in fair value and realized gains on investments is optional, but if elected must follow this Subtopic's formulas, and the entity must disclose its inclusion/exclusion practice (830-946-45-4, 45-36, 830-946-50-1).", "If separate reporting is elected: (fair value in FC − cost in FC) × valuation-date spot rate = unrealized fair value appreciation/depreciation, and (cost in FC × valuation-date spot rate) − cost in functional currency = unrealized foreign currency gain or loss; substitute sale proceeds and sale trade date for sales (830-946-45-17, 45-20).", "Foreign currency cash is treated like a security: receipts are recorded at the receipt-date spot rate (no gain or loss on acquisition), disbursements release cost (specific identification, FIFO, or average) and produce realized foreign currency gain or loss, with balances retranslated each valuation date (830-946-45-7 through 45-9).", "Forward exchange contracts are recorded at inception at the forward rate and subsequently measured at fair value daily, with unrealized gain or loss equal to the difference between the forward-rate value and the original contracted value, reclassified to realized at settlement; a hedged security purchase and its payable are still recorded at the trade-date spot rate (830-946-45-10 through 45-12).", "Interest, discount accretion/premium amortization, dividends (recorded on the ex-date), and expenses are accrued daily in the foreign currency and translated at daily spot rates (weekly or monthly averages acceptable if rates are not volatile), with the related receivable/payable retranslated daily (830-946-45-25, 45-28, 45-31, 45-35).", "Nonreclaimable withholding tax is accrued with the related income when the rate is fixed and known and shown parenthetically or as a contra item in the income section; reclaimable tax is recorded as a receivable, not an expense (830-946-45-34, 45-39)." ], "categories": [ "Foreign currency", "Industry-specific", "Presentation", "Disclosure" ], "audience_level": "advanced", "student_note": "Exam questions here hinge on the elective nature of \"isolating\" the currency component of investment gains—many students wrongly assume separation is mandatory, when the rule is only that the fund disclose which practice it uses. Also remember that acquiring foreign currency never creates a gain or loss; only disbursement (or revaluation) does.", "related_topics": [ "830-10", "830-20", "946-10", "946-320", "946-830", "820" ], "key_concepts": [ "functional currency", "spot rate translation", "realized vs. unrealized foreign currency gain or loss", "forward exchange contract", "foreign withholding tax", "investment company net asset value", "trade date versus settlement date", "discount accretion and premium amortization" ] } ``` Source downloaded (UTC): 2026-09-10T01:47:48.746Z to 2026-09-10T01:47:48.746Z Record version: sha256:186c64721f4193d2ee257ff6dcf4344a153a4011fe1d255dcfa557f98065e741 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/830/946/#00-status) SEC content: no ##### [830-946-00-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:48.746Z to 2026-09-10T01:47:48.746Z Record version: sha256:b26f51f0f8368ea58aa3778bc7403861d6c8c5cc73b177f4d56a4a0caf252572 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
Spot RateAddedAccounting Standards Update No. 2014-0603/14/2014
946-830-05-2AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-45-4AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-45-7AmendedAccounting Standards Update No. 2014-0603/14/2014
946-830-45-10AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-45-13 through 45-17
AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-45-19AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-45-20AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-50-2AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-55-4AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-55-7AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-55-8AmendedAccounting Standards Update No. 2012-0410/01/2012
946-830-55-13AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T01:47:52.540Z to 2026-09-10T01:47:52.540Z Record version: sha256:add4678deb34043eaf59bd9129f241efd7b5cb60ad577185825f154cb092a9ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/830/946/#05-overview-and-background) SEC content: no ##### [830-946-05-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:52.540Z to 2026-09-10T01:47:52.540Z Record version: sha256:5f3621efc25de4af32f283f91d45eea5cdbd9e731d1f40859a4770cdc0b30ef0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:52.540Z to 2026-09-10T01:47:52.540Z Record version: sha256:90b7ba249408f578c235bb05e70d4f5cb4b8affd2d95395b3c2c1c43d4dbcfe6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:52.540Z to 2026-09-10T01:47:52.540Z Record version: sha256:a90cc677739db233a0ba23ae15c105d918b05aabf7a2c4aa316445d1c63d7c43 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T01:47:55.394Z to 2026-09-10T01:47:55.394Z Record version: sha256:95384cda2b9d1c5dd669d0a606d8112d21af74a46de7f155890670b1dc032a74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/830/946/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [830-946-15-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:47:55.394Z to 2026-09-10T01:47:55.394Z Record version: sha256:b85afdb8bc4f0ce6d031e8d79dc0ed5c786743c0f522de2e17307102e47989e6 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 946-10-15. Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:197a9593e893c885e4193c4d48e53d66133e66ee1b9015512d3ac137035b9744 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/830/946/#45-other-presentation-matters) SEC content: no #### Overall Guidance ##### [830-946-45-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:d29ea59ec1a9e5a70cb6fb80e9b5aa22ee5b1539882afa5d6eb1f49c9c6a4d29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The ongoing revaluation of investments and receivables or payables representing unsettled foreign currency transactions shall be classified as unrealized foreign currency gain or loss. On settlement (when there is actual cash flow), a realized foreign currency gain or loss shall be recorded. ##### [830-946-45-2](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:9a9c8d2e519ffeab246179808ae318453b72482ea6948df38edecb072815f81e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Each transaction denominated in a foreign currency can initially be measured only in that currency. Any differences between originally recorded amounts and currently consummated or measured amounts in the reporting currency are a function of both of the following factors: 1. a Foreign exchange rate changes 2. b Changes in market prices. ##### [830-946-45-3](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:75e673cdd9009c433e71a0214ae786d69085615e20fe5a919e190839e9c093e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Those effects shall be identified, computed, and reported other than for gains and losses on investments. ##### [830-946-45-4](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:4e5b2145f7e0a3526144caad755de53013a5375f6f51cbfe6885c4b612d063b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The practice of not separately disclosing the portion of the changes in [fair values](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.") of investments and realized gains and losses thereon that result from foreign currency rate changes is permitted. However, separate reporting of such gains and losses is allowable and, if adopted by the reporting entity, shall conform to the guidance in this Subtopic. ##### [830-946-45-5](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:f20b27e58498932ea1bfcaf976d77bc2063525e90a2cf944d34590f32000bacd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For funds that invest in countries that are highly inflationary, the separate measurement and disclosure of the foreign currency element may not be meaningful. ##### [830-946-45-6](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:0ddbe01f7da1eb1cde9ec9050ca20f71de647aebcbe9610df72626746fc09c55 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The remainder of the guidance in this Section is organized as follows: 1. a Cash 2. b Derivative instruments—forward exchange contracts 3. c Securities 4. d Receivables and payables 5. e Income 6. f Expenses 7. g Financial statement presentation. #### Cash ##### [830-946-45-7](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:7976c94244558f22c19a7625d1cd80f10ca5bace7fd8f0ffe2654cb014818836 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foreign currency cash balances and movements shall be accounted for in the same way that foreign-currency-denominated securities are. Every receipt of a foreign currency shall be treated as a purchase of a security and recorded in the functional currency at the [spot rate](https://asc.understandingaccounting.org/glossary/s/#spot-rate "The exchange rate for immediate delivery of currencies exchanged.") on the cash receipt date. Similarly, every disbursement of a foreign currency shall be treated as a sale of a security and the appropriate functional currency cost shall be released, depending on whether a specific identified cost, the first-in, first-out (FIFO) method, or an average cost is used. ##### [830-946-45-8](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:25f4b96e2d4d22250a5b85d63a8c5500f21d0c8a97049f6f3fcd5456f898a08f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquisition of a foreign currency does not result in any foreign currency gain or loss. However, the disbursement of a foreign currency shall result in a realized foreign currency gain or loss that is the difference between the functional currency equivalent of the foreign currency when it was acquired and the foreign currency disbursement translated at the spot rate on the disbursement date. ##### [830-946-45-9](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:c2f6ddbf1768b0b75c76dd72ee100bc555e59c71bf4053bef72da68eb205c278 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Also, as is the case with all other assets and liabilities denominated in a foreign currency, foreign currency cash balances shall be translated on each valuation date at the spot rate on that date, resulting in unrealized foreign currency gain or loss. #### Derivative Instruments—Forward Exchange Contracts ##### [830-946-45-10](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:5ab10034dc0578effb96e43e13c0cd39cb13ec1a34d6af71d51312b6110ddefb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a fund enters into a [forward exchange contract](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."), the forward contract shall be recorded on the inception date at the forward rate and subsequently measured at fair value daily. ##### [830-946-45-11](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:ffdd5ca3d2b40aa1c72969d94269a3182f60cc273b5bc538865295ff5012e329 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The unrealized foreign currency gain or loss on such a contract is the difference between the foreign currency amount valued at the forward rate (on the valuation date) and the original contracted value of the forward contract (the amount to be received or paid at expiration or settlement date). On the expiration or settlement date, the unrealized foreign currency gain or loss shall be reclassified as realized foreign currency gain or loss. ##### [830-946-45-12](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:1bb88caef34e02e3ea09d8bc85fe8c104b0f00b7af9527110d416373356a4917 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the forward contract is meant to hedge the payable for the purchase of a security denominated in a foreign currency, the cost of the investment purchased and the related payable that has been hedged by the forward contract shall still be recorded at the spot rate on the trade date, and the payable shall be translated into the functional currency daily. #### Securities ##### [830-946-45-13](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:43fca9dac7927ef16920b8f6d4721058d655916adc67335aed655d312ee8f015 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance on foreign currency matters related to securities is organized as follows: 1. a Purchased interest 2. b Subsequently measuring at fair value 3. c Sale of securities 4. d Sale of interest. ##### [830-946-45-14](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:0b4af58610510070417cc9021694467a90b51d84a95abe5cbc7817bc5a866070 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Purchased interest represents the interest accrued between the last coupon date and the settlement date of the purchase. It should be recorded in the functional currency as interest receivable at the spot rate on the purchase trade date, and subsequently measured at fair value using each valuation date's spot rate. After the settlement date, daily interest income should be accrued at the daily spot rate. It may be impractical to prepare the foregoing calculations daily, and, therefore, the use of a weekly or monthly average rate may be appropriate in many cases, especially if the exchange rate does not fluctuate significantly. However, if the exchange rate fluctuation is significant, the calculation should be made daily. ##### [830-946-45-15](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:6735db520248874075a090aaf6fdc675df5a1dbe1aef37f1dae4d5d03ff2bc2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A fund investing in foreign securities generally invests in such securities to reap the potential benefits offered by the local capital market. It may also invest in such securities as a means of investing in the foreign currency market or of benefiting from the foreign currency rate fluctuation. The extent to which separate information regarding foreign currency gains or losses will be meaningful will vary depending on the circumstances, and separate information may not measure with precision foreign exchange gains or losses associated with the economic risks of foreign currency exposures. A foreign currency rate fluctuation, however, may be an important consideration in the case of foreign investments, and a reporting entity may choose to identify and separately report any resulting foreign currency gains or losses as a component of unrealized fair value gains or losses on investments. ##### [830-946-45-16](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:23810a8c24d899e5dcf2e6c6bc2c55f89d7deb8f8948fd70e9d276c2553f25aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fair value of securities shall initially be determined in the foreign currency and translated at the spot rate on the purchase trade date. The unrealized gain or loss between the original cost (translated on the trade date) and the fair value (translated on the valuation date) comprises both of the following elements: 1. a Changes in the fair value of securities before translation 2. b Movement in foreign currency rate. ##### [830-946-45-17](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:bee68eb3c28fe24baae3ed4773d4f6a4b3ec9e32f15d07ea0ef61898671b0d86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Such movements may be combined as permitted by paragraph [946-830-45-4](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-4). If separate disclosure of the foreign currency gains and losses is chosen, the changes in the fair value of securities before translation should be measured as the difference between the fair value in foreign currency and the original cost in foreign currency translated at the spot rate on the valuation date. The effect of the movement in the foreign exchange rate shall be measured as the difference between the original cost in foreign currency translated at the current spot rate and the historical functional currency cost. These values can be computed as follows: 1. a (Fair value in foreign currency - original cost in foreign currency) x valuation date spot rate = unrealized fair value appreciation or depreciation. 2. b (Cost in foreign currency times valuation date spot rate) - cost in functional currency = the unrealized foreign currency gain or loss. ##### [830-946-45-18](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:34ed462b7cccd51667db55a98997d0b97d305f57a49a6f17650bdcea74e356e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The preceding formulas could be refined to isolate and report the rate change element in the changes in the gains or losses on investments between valuation dates. However, the cost of doing so would not be justified for the relatively minor improvement thereof. Furthermore, such refinement would both: 1. a Be a departure from the method required for federal income tax reporting for realized foreign currency gains or losses on debt securities 2. b Represent a departure from the practice of those investment companies that presently separately report in their financial statements the effects of foreign exchange on securities gains or losses. ##### [830-946-45-19](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:aba3cdf710bece97135397188386da59cd0be33d19dabbe1e09a7f57905601d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For short-term securities held by a fund that follows the amortized cost method of valuation, the amortized cost value should be substituted for fair value in the formulas given in the preceding two paragraphs if separate reporting is chosen by the reporting entity. ##### [830-946-45-20](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:845565c3ddfae13de8ecba8b4194caa9325228b506bdb0e6c6305a281cd408c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If separate reporting of foreign currency gains and losses on sales of securities is chosen by the reporting entity, the computation of the effects of the changes in fair value and the foreign currency rate is similar to that described in paragraphs [946-830-45-17 through 45-18](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-17) . Fair value in the formula given in those paragraphs should be replaced with sale proceeds and valuation date shall be replaced with sale trade date. Accordingly, the values shall be computed as follows: 1. a (Sale proceeds in foreign currency - original cost in foreign currency) x sale trade date spot rate = realized fair value gain or loss on sale of security. 2. b (Cost in foreign currency x sale trade date spot rate) - cost in functional currency = realized foreign currency gain or loss. ##### [830-946-45-21](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:c7ede6692920f508130a78f0fc573b3a743ffe741bd4500591aa9daaa72dcd6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sale of a security results in a receivable for the security sold. The related receivable shall be recorded on the trade date at the spot rate. On the settlement date, the difference between the recorded receivable amount and the actual foreign currency received converted into the functional currency at the spot rate shall be recognized as a realized foreign currency gain or loss. ##### [830-946-45-22](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:4848cc0418a22570f1896deb3194476261586c34525994d3182dcd0dfcd7a14b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest sold represents the accrued interest receivable between the last coupon date and the settlement date of sale of the security. The difference between the recorded interest receivable amount and the actual foreign currency received (converted into the functional currency at the spot rate) shall be recognized as a realized foreign currency gain or loss. #### Receivables and Payables ##### [830-946-45-23](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:fde062cf93c6f4fd6479b8c836c9614fd189e690b7893380de4cd55d9a0d7bac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All receivables and payables that are denominated in a foreign currency and that may relate to income or expense, or to securities sold or purchased, shall be translated into the functional currency each valuation date at the spot rate on that date. The difference between that amount and the functional currency amount that was recorded at various spot rates for income and expense items, and at the trade date spot rate in the case of sales and purchases of securities, is unrealized foreign currency gain or loss. Upon liquidation of the receivable or payable balance in a foreign currency, the difference shall be reclassified as realized foreign currency gain or loss. #### Income ##### [830-946-45-24](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:47cb10ade254cc35d2f2d6649d8c85ef3fdc6d043d2a5b7977acd1dd75cfd336 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance on foreign currency matters involving income is organized as follows: 1. a Interest 2. b Accretion and amortization 3. c Dividends 4. d Withholding tax. ##### [830-946-45-25](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:96476969fadaac9f1203623768fa9e891efdaf3dc9b3b323b37f2588d45e8f09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest on securities denominated in a foreign currency shall be calculated at the stated rate of interest in the foreign currency. The interest shall be accrued daily in the foreign currency at the stated interest rate and translated into the functional currency at the daily spot rate. It may be impractical to prepare such a calculation daily, and, therefore, the use of a weekly or monthly average rate may be appropriate in many cases, especially if the exchange rate does not fluctuate significantly. However, if the exchange rate fluctuation is significant, the calculation shall be made daily. ##### [830-946-45-26](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:7ce530da7b11d3e665e35184748d12b07890c58eacf4e4ab8ba9af750d1ff4e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The related receivable balance along with purchased interest, if any, shall be accumulated in the foreign currency and translated into the functional currency daily using the spot rate for that date. The difference between the income accrued in the functional currency and the foreign currency receivable at the valuation date spot rate shall be recognized as an unrealized foreign currency gain or loss. ##### [830-946-45-27](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:62262d7b03344000a04624a9e2e2ea5382f9dd0bba681d9f2a480aa1af6e9cef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When the interest is received and recorded in the functional currency at the spot rate on that date, the unrealized foreign currency gain or loss shall be reclassified as realized foreign currency gain or loss. ##### [830-946-45-28](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:ac03f2a8646c22107a167e1ca4b7e4f378c3916b1e64d4f6cef80d3d03ce4840 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accretion of discounts and amortization of premiums on bonds shall be calculated daily in the foreign currency. The resulting amount of income or offset to income shall be translated into the functional currency using that day's spot rate. The same foreign currency amount shall be recorded as an addition to cost for accretion of discounts and a reduction to cost for amortization of premiums. Accordingly, cost consists of the original cost, translated at the spot rate in effect on the trade date the bond was bought and adjusted for discount accretion or premium amortization at the spot rate on the date of adjustment. As stated in paragraph [946-830-45-25](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-25), use of a weekly or monthly average rate may be appropriate in certain circumstances. ##### [830-946-45-29](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:f67072148be576205e5e7d33548c62f078ada4147faea66411a52e07aea4dfbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On maturity, the carrying cost (including accretion or amortization) of the security in the foreign currency equals the proceeds. However, this will not be the case in the functional currency. The original cost shall be translated into the functional currency at the spot rate on the trade purchase date and the accretion or amortization shall be translated at periodic spot rates. The proceeds shall be translated into the functional currency at the spot rate on the maturity date. The difference between the proceeds and the accumulated cost in the functional currency shall be recognized as a realized foreign currency gain or loss. ##### [830-946-45-30](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:3b90cef48eb0ed9ea1509e3373f286fa07400dd97d9b1965a0c3355bab564ba4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Recording dividends on foreign securities is often difficult because, in certain countries, entities customarily declare dividends retroactively or there is a lack of timely information. Additionally, in some countries, the sequencing of the declaration date and ex-dividend date may be different from the sequencing of these dates in the United States, thus necessitating a modification of the practice of recording dividends on the ex-dividend date (see paragraph [946-320-35-5](https://asc.understandingaccounting.org/asc/320/946/#320-946-35-5)). Also, foreign entities often declare stock dividends instead of cash dividends or take other corporate actions such as issuing rights or warrants. ##### [830-946-45-31](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:d5e28fd7f2668c586d9c7cc893255726749c4bf55f733bf6257b1fe0624c9b72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Dividend income on securities denominated in foreign currency shall be recorded on the ex-date, at the spot exchange rate of the foreign currency to the reporting currency on that date. The related dividend receivable shall be translated into the functional currency daily at the spot rate, and the difference between the dividend accrued in the functional currency and the foreign currency receivable at the valuation date spot rate shall be recognized as an unrealized foreign currency gain or loss. When the dividend is received, the unrealized foreign currency gain or loss shall be reclassified as realized foreign currency gain or loss. ##### [830-946-45-32](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:5368295b759d807cc1771c1a54791329ba0e3f9440deaa42c285212a19b06d73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The preceding approach to measuring investment income ensures that investment income accrued on foreign securities reflects the investment transaction without regard to the foreign currency gain or loss created in the time between the accrual and collection of the income. ##### [830-946-45-33](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:bbd79e48cf228287708c59b81d93be32a1a478f38dc28854be1602002dbddc8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many foreign countries do not tax capital gains on investments by foreign investors; however, if such gains are taxable, an accrual for capital gains taxes payable on both realized and unrealized gains shall be included in the [net asset value per share](https://asc.understandingaccounting.org/glossary/n/#net-asset-value-per-share "Net asset value per share is the amount of net assets attributable to each share of capital stock (other than senior equity securities, that is, preferred stock) outstanding at the close of the period. It excludes the effects of assuming conversion of outstanding convertible securities, whether or not their conversion would have a diluting effect.") calculation. ##### [830-946-45-34](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:6439eae6da320f10b241c019c7eee09d29afb029a6b8bf2daa473eabf5a1b7ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whenever tax is withheld from investment income at the source, the amounts withheld that are not reclaimable shall be accrued along with the related income on each income recognition date if the tax rate is fixed and known. If the tax withheld is reclaimable from the local tax authorities, it shall be recorded as a receivable and not as an expense. When the investment income is received net of the tax withheld, a separate realized foreign currency gain or loss shall be computed on the gross income receivable and the accrued tax expense. If the tax rate is not known or estimable, such expense or receivable shall be recorded on the date the net amount is received; accordingly, there would be no foreign currency gain or loss. However, if a receivable is recorded, there may be a foreign currency gain or loss through the date such receivable is collected. #### Expenses ##### [830-946-45-35](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:0e5e3f86edaad6522fdd5d4fc0b57d04d083e904689ac6f4799c9347b7f41223 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting for expenses payable in a foreign currency is identical to that for investment income receivable in a foreign currency. An expense shall be accrued as incurred and translated into the functional currency at the spot rate each day. The use of an average weekly or monthly foreign currency rate would be acceptable if the foreign currency rate does not fluctuate significantly. The related accrued expense balance shall be accumulated in the foreign currency and translated into the functional currency daily, using the spot rate for that date. The difference between the expense accrued in the functional currency and the related foreign currency accrued expense balance translated into the functional currency at the valuation date spot rate shall be recognized as an unrealized foreign currency gain or loss. When the expense is paid, the unrealized foreign currency gain or loss shall be reclassified as realized foreign currency gain or loss. #### Financial Statement Presentation ##### [830-946-45-36](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:ddff3b1027dbf0498f0ab6d76e1d6a8c48b17866b9acc6fb8dad66e69913fd0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment company is not required to separately disclose that portion of unrealized and realized gains and losses on investments that results from foreign currency changes. All other foreign currency gains or losses shall be reported under the realized and unrealized gain or loss on investments and foreign currency section in the statement of operations. ##### [830-946-45-37](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:603315b5ad95bdd03204571b3d45bd17b902730ed8278f70b21b8dbbfa5656bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, realized foreign currency gain or loss on interest and dividends shall be included in the realized foreign currency gain or loss component of net realized gain or loss. All unrealized foreign currency gain or loss, other than those on investments, shall be reported as unrealized appreciation or depreciation on translation of assets and liabilities in foreign currencies. The statement of changes in net assets and the statement of assets and liabilities shall reflect the same realized and unrealized gain and loss components. However, it is permissible to report each of the following items as single components in those statements: 1. a The combination of the net realized gains or losses from investments with net realized gains or losses from foreign currency transactions 2. b The combination of the net unrealized appreciation (depreciation) on investments with the net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies. ##### [830-946-45-38](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:f201b0a73cf6763b7b3ed033ffbe655f2c6f1bdd2b88d6bd921a38504f464b10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If separate reporting of the unrealized and realized foreign currency gains or losses on investments is chosen, such gains and losses shall be aggregated with all other foreign currency gains and losses and reported as described in the preceding paragraph. ##### [830-946-45-39](https://asc.understandingaccounting.org/asc/830/946/#830-946-45-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:02.598Z to 2026-09-10T01:48:02.598Z Record version: sha256:b239ab87032129fde401ac6ee4d4a1d07ed3da9c21284b3a422947c643ae2a31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Taxes withheld that are not reclaimable, if any, on foreign source income shall be deducted from the relevant income item and shall be shown either parenthetically or as a separate contra item in the income section of the statement of operations. Taxes levied on the aggregate income or capital gains of the investment company itself shall be presented in a manner that is similar to that used for income taxes. The normal withholding taxes shall be presented as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-83A70638-9B6B-4B96-850A-822199350D19-low.gif) Interest or dividend income (net of withholding taxes of $ X) $XXX or Interest or dividend income $XXX Less withholding tax (XXX) Source downloaded (UTC): 2026-09-10T01:48:04.400Z to 2026-09-10T01:48:04.400Z Record version: sha256:ee9b31bdc450344664ab3f7c69b595c65167696f70325a75e38a003107396b93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/830/946/#50-disclosure) SEC content: no ##### [830-946-50-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:04.400Z to 2026-09-10T01:48:04.400Z Record version: sha256:1ef424a57385bb227adb215c0ae8f2e81f57aa72945ed36851fd92e0d0453c76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose its practice of either including or excluding that portion of realized and unrealized gains and losses on investments that results from foreign currency changes with or from other foreign currency gains and losses. ##### [830-946-50-2](https://asc.understandingaccounting.org/asc/830/946/#830-946-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:04.400Z to 2026-09-10T01:48:04.400Z Record version: sha256:aedb3ce14f1e9bb8e280341554f94466977544ff4523674e57454b133aff352e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foreign currency risk associated with investing in foreign securities shall be assessed continuously by management and considered for financial statement disclosure, including disclosures about all of the following: 1. a Liquidity. Because certain foreign markets are illiquid, market prices may not necessarily represent [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."). 2. b Size. If market capitalization is low, a fund's share in the entire market (particularly if single-country funds are involved) or in specific securities may be proportionately very large, and the fair value, consistent with Topic 820, may not be representative of the price that would be received if the fund sold its large proportion of the specific security ("block") at the measurement date. 3. c Valuation. Because of liquidity problems as well as other factors, such as securities that are unlisted or securities that are traded in inactive markets, funds are required to develop procedures consistent with Topic 820 for measuring the fair values of such securities. Doing so may be difficult in a foreign environment; while others may perform the research and provide supporting documentation for fair values, the ultimate responsibility for determining the fair values of securities rests with the management. ##### [830-946-50-3](https://asc.understandingaccounting.org/asc/830/946/#830-946-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:04.400Z to 2026-09-10T01:48:04.400Z Record version: sha256:3bf793287583dc8234d49c7f3f0ab094df14d81dad00fa622a5632875e10d4f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. These disclosures are no different from those that might be required for domestic securities with the same attributes. The preceding risks shall be disclosed in the notes to financial statements if such factors exist in the markets in which the fund has material investments. ##### [830-946-50-4](https://asc.understandingaccounting.org/asc/830/946/#830-946-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:04.400Z to 2026-09-10T01:48:04.400Z Record version: sha256:2f5458e52599c9317d21c129654bd9a2377795d16267bcce7257431e8242f909 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For funds that invest in countries that are highly inflationary, the separate disclosure of the foreign currency element may not be meaningful and the disclosures in this Section may not be appropriate. Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:3f8e0f9d2e8f49be9af3fa45dd15ac535c0b0e620c4a82d97ded3d15ec210413 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 830-946-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/830/946/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [830-946-55-1](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:b3c8ef3753ea19e465f836d46b108aff24e6a83f6fda018813b3948c850d8c32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For illustrative purposes, this Section assumes that the U.S. dollar is the functional currency of the reporting investment company. ##### [830-946-55-2](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:c0653122e05e84fd2a412678b5b247bd2b23d7ff1a9dc550aaee25e1f7648de2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the guidance in this Subtopic. The first two illustrations apply if separate disclosures of the foreign currency elements of unrealized and realized gains and losses on investments are chosen by the reporting entity. ##### [830-946-55-3](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:bf7706b1ccc588c44db418e5d71e979a05c7c019063022196331a6c192f5e20e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculations for securities purchases and sales follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-BF579DFD-6F36-44B6-8C61-1CF2D4746FCD-low.gif) ABC Fund uses US dollars (USD) as its functional currency. "ABC buys 1,000 shares of XYZ GBP 15.00 with a spot exchange rate of USD 1.75 = GBP 1.00." Foreign currency cost basis = " GBP 15.00 × 1,000 " = GBP " 15,000 " Functional currency cost basis = " GBP 15,000 × 1.75 " = USD " 26,250 " Market gain or loss = (Foreign currency sale proceeds − foreign currency cost) × foreign exchange rate on day of sale Currency gain or loss = Foreign currency cost × (foreign exchange rate day of sale − foreign exchange rate day of purchase) "Assume a sale of 1,000 XYZ GBP 12.00 and USD 1.50 = GBP 1.00:" Foreign Currency proceeds = "GBP 12.00 × 1,000" = GPB " 12,000 " Functional currency proceeds = "GBP 12,000 × 1.50" = USD " 18,000 " Market loss = "(GBP 12,000 − GBP 15,000) × 1.50" = USD " (4,500)" Currency loss = "(GBP 15,000 × 1.50 − 1.75)" = USD " (3,750)" Total loss USD " (8,250)" Proof Functional currency proceeds USD " 18,000 " Functional currency cost USD " (26,250)" USD " (8,250)" ##### [830-946-55-4](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:9c5b52bf1e140041244990a7c1602e291a4cb7551ef075b5c33a5a2baf2d81b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculations and journal entries related to subsequently measuring the securities 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.") follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-A3E3E8FF-EC82-4391-BFF8-791586282B85-low.gif) DAY 1: "1,000 XYZ measured at fair value GBP 16.00; spot rate: USD 1.85 = GBP 1.00." Fair value gain or loss = (Foreign currency fair value − foreign currency cost) × current foreign exchange rate Currency gain or loss = Foreign currency cost × (current foreign exchange rate − foreign exchange rate on day of purchase) Fair value gain = "(GBP 16,000 − GBP 15,000) × 1.85" = USD " 1,850 " Currency gain = "GBP 15,000 × (1.85 − 1.75)" = USD " 1,500 " Total gain in functional currency = USD " 3,350 " "Total gain − (GBP 16,000 × 1.85) − (GBP 15,000 × 1.75) = USD 29,600 − USD 26,250 = USD 3,350" Measure at Fair Value Journal Entries \[Average rates may be used if fluctuations in exchange rates aren't significant\] DAY 2: "1,000 XYZ measured at fair value GBP 17.00; spot rate: USD 1.80 = GBP 1.00." Fair value gain = "(GBP 17,000 − GBP 15,000) × 1.80" = USD " 3,600 " Currency gain = "GBP 15,000 × (1.80 − 1.75)" = USD 750 Total gain in functional currency USD " 4,350 " Daily Journal Entries Fair value gain or loss = "USD 3,600 − USD 1,850" = USD " 1,750 " Currency gain or loss = "USD 750 − USD 1,500" = USD (750) "Day 2 gain (USD 4,350 − USD 3,350)" = USD " 1,000 " ##### [830-946-55-5](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:f1c1e38e6049631fe7a91c2becb65e7c854b07ee071a4a245a88fff65620a600 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculations and journal entries for changes in foreign currency exchange rate follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-4E5B4E87-4D4B-4CCD-9FBA-B2DCECE6378A-low.gif) "Sale of 1,000 XYZ GBP 12.00 = GBP 12,000 receivable USD 1.50 = GBP 1.00 " = USD " 18,000 " DAY 1: Spot rate moves to USD 1.55 = GBP 1.00. Currency gain = "GBP 12,000 × (1.55 − 1.50) .05" = USD 600 DAY 2: Spot rate moves to USD 1.58 = GBP 1.00. Currency gain = "GBP 12,000 × (1.58 − 1.50) .08 " = USD 960 Currency gain Day 1 Day 2 Daily Journal Entry USD 600 USD 360 ##### [830-946-55-6](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:0dc697c2c010351488efd7e54d120ac504acc90b9c10d5338f88f5c75d4a7633 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculations and entries for changes between the trade date and the settlement date follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-FFE439EB-23A9-4F5C-98A6-D4E229E6F6BD-low.gif) Trade Date "Purchase 1,000 XYZ GBP 15.00; exchange rate: USD 1.75 = .00." Cost basis: "USD 26,250 or GBP 15,000" Debit: sterling securities at cost USD " 26,250 " Credit: payables for securities purchased USD " 26,250 " Settlement Date "Spot rate: USD 1.80 = GBP 1.00; GBP 15,000 is purchased at the spot rate for USD 27,000." Debit: payables for securities purchased USD " 26,250 " Debit: realized currency gain or loss USD 750 Credit: cash USD " 27,000 " ##### [830-946-55-7](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:fef4c05982267ff4dc26b5c67d6390170a37566cd6fef7f288a88bd5a475aeb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculations and entries for settlement against foreign currency cash balances follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-614D71F0-EC91-4F24-AB1E-FCF27D18D659-low.gif) "GBP 20,000 balance is available in London." "Lot a: GBP 10,000 purchased USD 1.65 per GBP 1.00" "USD US cost basis: USD 16,500" "Lot b: GBP 10,000 purchased USD 1.85 per GBP 1.00" "USD US cost basis: USD 18,500" Assume lot b will be liquidated first at USD 1.80 per GBP 1.00. Lot b DR: cash USD " 18,000 " DR: realized currency gain or loss USD 500 CR: sterling cash at cost USD " 18,500 " Assume one half of lot a will be liquidated at USD 1.80 per GBP 1.00. Lot a DR: cash USD " 9,000 " CR: sterling cash at cost USD " 8,250 " CR: realized currency gain or loss USD 750 Realized foreign exchange gain on payable remains the same. Between Purchase Settlement and Sale Trade Dates "Measure the holding at fair value, based on both local market price and daily spot rate." ##### [830-946-55-8](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:a85117ab2be150615bdbe36dcdc72bafcd4e6564825d9d1c1e93d09fcdedb0ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculations and entries for the sale of XYZ shares follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E2F1D56D-0DDD-422B-B11D-8749105AABE4-low.gif) "Sell 1,000 XYZ GBP 18.00; exchange rate: USD 1.90 = GBP 1.00" "Total proceeds: USD 34,200 or GBP 18,000" Foreign exchange gain is recognized on the sale trade date based on the holding period. Receivable is booked at the spot rate on sale trade date. Debit: receivable for securities sold USD " 34,200 " "Credit: sterling securities at cost (GBP 15,000 x 1.75)" = USD " 26,250 " "Credit: realized fair value gain or loss (GBP 18,000 - GBP 15,000) x 1.90" = USD " 5,700 " (a) "Credit: realized currency gain or loss (GBP 15,000 x 1.90) - 26,250" = USD " 2,250 " (a) "Maintain local currency basis (GBP 18,000) on the receivable record." Between Sale Trade Date and Settlement Date Mark the receivable at fair value based on the prevailing spot rate. Sale Settlement Date Spot rate: USD 1.85 = GBP 1.00 "GBP 18,000 is converted at the spot rate to USD 33,300." Foreign exchange loss is recognized upon the receipt (settlement) of the receivable. Debit: cash USD " 33,300 " Debit: realized currency gain or loss USD 900 Credit: receivables from securities sold USD " 34,200 " If foreign currency cash received is to be kept as local currency: "Purchase: GBP 18,000 USD 1.85 = GBP 1.00" "Cost basis: USD 33,300" Debit: sterling cash at cost USD " 33,300 " Credit: cash USD " 33,300 " (a) If separate disclosures of the foreign currency elements of unrealized and realized gains and losses on investments are chosen by the entity. ##### [830-946-55-9](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:9e66386389fc9f6301f072defe07ce78a7ba4921963d2c6d74bd131d7b3f7f72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides illustrative financial statements that show application of the requirements in this Subtopic. ##### [830-946-55-10](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:7599180f9b22c78df1c4d53bac28b5562d9d9fa1b3322e371aa44336d090a376 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustrative statement of operations follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-16040A1F-EE40-48E1-8031-85588535C439-low.gif) The ABC Fund Statement of Operations "Year Ended December 31, 19X1" Investment income Interest (net of withholding taxes of $XXXX) $XXXX Dividends (net of withholding taxes of $XXXX) XXXX XXXX Expenses Investment advisory fee XXXX Interest XXXX Professional fees XXXX Custodian and transfer agent fees XXXX Distribution expenses XXXX Total expenses XXXX Net investment income XXXX Realized and unrealized gain (loss) from investments and foreign currency Net realized gain (loss) from: Investments XXXX Foreign currency transactions (a) XXXX Net increase (decrease) in unrealized appreciation or (depreciation) on: Investments XXXX Translation of assets and liabilities in foreign currencies (a) XXXX Net realized and unrealized gain (loss) from investments and foreign currency XXXX Net increase (decrease) in net assets resulting from operations $XXXX (a) "If separate reporting is adopted, these captions would also include foreign currency effects of realized and unrealized gains and losses on investments. If separate reporting is not adopted, such foreign currency effects would be included in the investments captions." See accompanying notes to financial statements. ##### [830-946-55-11](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:e3ceb5c1bf6c9b3b240d8d92ee691c8b3d879049b15eec08d0fb644986fbfa58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustrative statement of changes in net assets follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-283CE683-870E-4E8B-AC14-E93812837A77-low.gif) "The ABC Fund " Statement of Changes in Net Assets "Year Ended December 31, 19X1" From operations: Net investment income $XXXX Net realized gains (losses) from investments (a) XXXX "Net realized gains (losses) from foreign currency transactions (a), (b)" XXXX Net increase (decrease) in unrealized appreciation (depreciation) on investments (c) XXXX "Net increase (decrease) in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies (b), (c)" XXXX Net increase (decrease) in net assets resulting from operations XXXX Dividends and distributions: From net investment income (XXXX) From net realized gains on investments and foreign currency transactions (XXXX) (XXXX) From share transactions: Net proceeds from sale of shares XXXX Cost of shares repurchased XXXX Dividends reinvested XXXX Net increase in net assets derived from share transactions XXXX Net increase (decrease) in net assets XXXX Net assets Beginning of period XXXX End of period (including undistributed net investment income of $XXXX) $XXXX (a) It is also acceptable to combine these lines and present them as a single item: Net realized gains (losses) from investments and foreign currency transactions. (b) "If separate reporting is adopted, these captions would also include foreign currency effects of realized and unrealized gains and losses on investments. If separate reporting is not adopted, such foreign currency effects would be included in the investments captions." (c) It is also acceptable to combine these lines and present them as a single item: Net increase (decrease) in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies. See accompanying notes to financial statements. ##### [830-946-55-12](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:e23ecccfc091907889c6f0f5d9d63550e5595e0500888ca70feac0425c26fb18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustrative statement of assets and liabilities follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C8FB80C1-556F-46CF-885F-81B251C5FAA3-low.gif) The ABC Fund Statement of Assets and Liabilities (a) "Year Ended December 31, 19X1" Assets "Investments in securities, at value (cost − $XXXX)" $XXXX Cash denominated in foreign currencies (cost − $XXXX) XXXX Cash XXXX Receivable for investments sold XXXX Dividends and interest receivable XXXX Receivable for shares of beneficial interest sold XXXX Deferred organizational expense XXXX Other assets XXXX Total assets $XXXX Liabilities Payable for investments purchased XXXX Payable for shares repurchased XXXX Payable to affiliates XXXX Other liabilities XXXX Total liabilities $XXXX Net assets Beneficial interest XXXX shares of $XXXX par value outstanding (unlimited amount authorized) $XXXX Undistributed net investment income XXXX Undistributed net realized gains from investments (b) XXXX Undistributed net realized gains (losses) from foreign currency transactions (a)(c) XXXX Net unrealized appreciation (depreciation) of investments (d) XXXX Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies (c)(d) XXXX Net assets applicable to shares outstanding $XXXX Net asset value per share $XXXX (a) This guidance does not reflect consideration of Subtopic 720-15. (b) It is also acceptable to combine these lines and present them as a single item: Undistributed net realized gains (losses) from investments and foreign currency transactions. (c) "If separate reporting is adopted, these captions would also include foreign currency effects of realized and unrealized gains and losses on investments. If separate reporting is not adopted, such foreign currency effects would be included in the investments captions." (d) It is also acceptable to combine these lines and present them as a single item: Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies. See accompanying notes to financial statements. ##### [830-946-55-13](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:842a26fa06b1aa2180ccf6dec1c001a2fc089959ad5ebba0aa70cdbf69053688 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustrative note to the financial statements concerning foreign currency follows. - Foreign Currency. Amounts denominated in or expected to settle in foreign currencies are translated into U.S. dollars at rates reported by a major New York City bank on the following basis: 1. a Fair value of investment securities, other assets, and liabilities—at the closing rate of exchange at the balance sheet date 2. b Purchases and sales of investment securities, income, and expenses—at the rate of exchange prevailing on the respective dates of such transactions (or at an average rate if significant rate fluctuations have not occurred). ##### [830-946-55-14](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:fb3dadc65a07c4e0b249d6b0cab776bd22ca2cc365498a28e176c6c9fbfafd30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustrative disclosure if the fund chooses to report the foreign currency elements of realized and unrealized gains and losses on investments follows. - The Fund isolates that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. - Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities including investments in securities at fiscal year end, resulting from changes in the exchange rate. ##### [830-946-55-15](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:408ed0b7aa520771b81b6c95b9f9c42112e00e8f7b2cd08a5fb16349369d3b08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustrative disclosure if the fund chooses not to report foreign currency elements of realized and unrealized gains and losses on investments follows. - The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. ##### [830-946-55-16](https://asc.understandingaccounting.org/asc/830/946/#830-946-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:48:07.587Z to 2026-09-10T01:48:07.587Z Record version: sha256:80a29c91e90c78f8dd78df0b3f7b3bb77b442ed807aade43f863c85ae222333e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrative note shall be considered if applicable to the respective fund. - The Fund has obtained the approval of the Central Bank for the registration and conversion into foreign currency of all proceeds of the offering to be invested in the ABC country securities markets, which by its terms ensures repatriation of such investment and the remittance of profits and dividends accruing on the investment. Notwithstanding the foregoing, the right of the Fund to repatriate its investments in ABC country securities and to receive profits, capital gains, and dividends in foreign exchange is subject to the power of the Central Bank, with the approval of the President of the ABC country, to restrict the availability of foreign exchange in the imminence of, or during, an exchange crisis or in times of national emergency. - The Fund has significant investments in the equity securities of entities located in the ABC country. Future economic and political developments in the country could adversely affect the liquidity or value, or both, of the ABC country securities in which the Fund is invested. - There are nationality restrictions on the ownership of certain equity securities of the ABC country entities. Based on confirmations that the Fund received from the ABC country's governmental authorities, the Fund believes that it is permitted to make certain investments through the ABC country's Trust that are otherwise available only to the ABC country.