International Accounting Standard 21, The Effects of Changes in Foreign Exchange Rates, IFRS

International Accounting Standards (IAS)
International Financial Reporting Standards (IFRS)

U.S. GAAP

IFRS, IAS

Accounting Topics

International Accounting Standard (IAS) 21
The Effects of Changes in Foreign Exchange Rates

International Financial Reporting Standards (IFRS)

International Accounting Standards (IAS)

U.S. GAAP by Topic

International Accounting Standard (IAS) 21

IAS 21

The Effects of Changes in Foreign Exchange Rates

IAS 21 first issued in July 1983

IAS 21 revised in December 2003

Recent amendment: by IAS 27 amended in January 2008

Functional Currency
      --> currency of primary economic environment
      --> operations are carried out in functional currency

Presentation Currency
--> financial statements are prepared in presentation currency

Translation from functional currency to presentation currency

      (1) Assets and liabilities
            --> closing rate
            --> spot exchange rate at the end of reporting period

      (2) Income and expenses
            --> exchange rates at transaction dates
            --> average rate for the period is allowed, if reasonable

Initial recognition of foreign currency transaction
      --> recorded in functional currency
      --> using the spot exchange rate between foreign currency and functional currency
      --> at transaction date

At the end of reporting period

      (1) foreign currency monetary items
            --> translated using closing rate

      (2) non-monetary items measured by historical cost (in a foreign currency)
            --> translated using exchange rate
            --> at transaction date

      (3) non-monetary items measured by fair value (in a foreign currency)
            --> translated using exchange rate
            --> at the date
            --> when the fair value was determined

Exchange differences on a monetary item
--> recognized in profit or loss

For a non-monetary item

      (1) if a gain or loss is recognized in other comprehensive income
            --> exchange component of such a gain or loss
            --> recognized in other comprehensive income

      (2) if a gain or loss is recognized in profit or loss
            --> exchange component of such a gain or loss
            --> recognized in profit or loss

Foreign currency derivatives and hedge accounting
--> covered by IAS 39 Financial Instruments: Recognition and Measurement.
--> not covered by IAS 21

U.S. GAAP by Topic

Accounting Topics

Inventory Valuation Methods

Depreciation Methods

Revenue Recognition Principle

Accrual Basis vs. Cash Basis Accounting

Basics of Journal Entries

Ratios for Financial Statement Analysis

Overview of Financial Statements

	Wiley IFRS 2008: Interpretation and Application of International Accounting and Financial Reporting Standards 2008 by Barry J. Epstein and Eva K. Jermakowicz (Paperback - Mar 28, 2008) Paperback Edition Book & CD-Rom Edition
	Wiley GAAP 2008: Interpretation and Application of Generally Accepted Accounting Principles 2008 Paperback Edition Book & CD-Rom Edition
	Wiley CPA Exam Review 2008: 4 Volume Set 4 Volume Set