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Generally Accepted Accounting Principles (GAAP) [2] provide rules for translation of foreign currency transactions and financial statements. SFAS 52 introduced the concept of functional currency , defined as "the currency of the primary economic environment in which the entity operates; normally, that is, the currency of the environment in ...
In contrast, historical cost accounting, based on the past transactions, is simpler, more stable, and easier to perform, but does not represent current market value. It summarizes past transactions instead. Mark-to-market accounting can become volatile if market prices fluctuate greatly or change unpredictably.
The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally. [1] Convergence in some form has been taking place for several decades, [ 2 ] and efforts today include projects that aim to reduce the differences between accounting standards.
A result of making a convenience translation is that the resulting financial information does not comply with all Generally Accepted Accounting Principles. It is also referred to as a convenience translation when a (language) translation is rendered for the convenience of reading a text in a different from the original language; however, the ...
In 1997 the United States Financial Accounting Standards Board issued Statement on Financial Accounting Standards No. 130 entitled "Reporting Comprehensive Income". This statement required all income statement items to be reported either as a regular item in the income statement or a special item as other comprehensive income.
A firm's translation risk is the extent to which its financial reporting is affected by exchange-rate movements. As all firms generally must prepare consolidated financial statements for reporting purposes, the consolidation process for multinationals entails translating foreign assets and liabilities, or the financial statements of foreign ...
It's a comment from president-elect Donald Trump that caught many people off guard. "We're going to be changing the name of the Gulf of Mexico to the Gulf of America," he said.
Transactions are listed in an accounting journal that shows a company's debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit. The total of the debits must equal the total of the credits, or the journal entry is considered unbalanced.