foreign currency transaction

Broad Transactions1

1. 830-20Foreign Currency Transactions830 Foreign Currency Matters

   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).