Foreign Currency Accounting (ASC 830)

What is ASC 830?

ASC 830 is a section of the Financial Accounting Standards Board (FASB) Accounting Standards Codification that provides guidance related to accounting for foreign currency transactions and translating financial statements of foreign operations. 

Aspects covered by ASC 830

ASC 830, Foreign Currency Matters, provides an in-depth framework for how to address the complexities of foreign currency accounting to ensure consistency and transparency in financial reporting for entities with international operations. Key areas included under ASC 830 include:  

• Functional currency determination, including criteria for determining an entity's functional currency, indicators for assessing the functional currency of a foreign operation, and procedures for changing an entity's functional currency and the implications of doing so
• Foreign currency transactions, including recognizing and measuring foreign currency transactions, how to treat gains and losses, and guidance related to monetary and non-monetary items denominated in foreign currencies.
• Translation of financial statements including guidelines for translating financial statements of foreign operations into the reporting currency, how to apply appropriate exchange rates for different components of the financial statements, and how to treat translation adjustments and their inclusion in other comprehensive income. 
• Reporting and disclosure of foreign currency matters, including disclosure requirements. 
• Hedging and derivatives, including how to account for foreign currency hedging activities, treat hedging instruments related to foreign currency exposure, and recognize gains and losses on hedging instruments and how that impacts financial statements
• Intercompany transactions denominated in foreign currencies and elimination of intercompany profits or losses in consolidated financial statements
• Consolidation of foreign subsidiaries, including procedures for consolidating foreign subsidiaries with different functional currencies and how to handle translation adjustments in the consolidation process
• Foreign currency hyperinflationary economies, including special considerations for translating financial statements in hyperinflationary economies and the criteria to identify these economies. 

As you can see, ASC 830 is a complex topic that covers a comprehensive range of areas and provides in-depth guidance related to accounting for foreign currency transactions and translating financial statements of foreign operations. 

Who is this class for? 

There are no prerequisites or advanced preparation needed to take this course. This course is ideal for accountants and finance professionals working in organizations that operate internationally, work with foreign vendors, or have global presence. Learning more about ASC 830 offers an excellent opportunity for anyone in accounting who would like to gain skills to succeed in the international business arena.