FASB ASC 830 Foreign Currency

FASB ASC Guide > FASB ASC 830

The Financial Accounting Standards Board (FASB) released Accounting Standards Codification 830 (ASC 830) to address foreign currency transactions and translation of financial statements, as well as guidance of how these are dealt with in the statement of cash flows and income tax related issues.  As the global business world becomes more interconnected, these types of situations are becoming more and more common.
There is a distinction between between transactions and translation that can be fairly simple to draw.  Translation mostly deals with a reporting entity that does business in a different currency than they report in. Ex. a Chinese company that has a subsidiary that operates in the US with US dollars.  The Chinese company reports in Yuan, and must translate all of this into Yuan.
On the other hand, Transactions occur when a company buys something from another company in another country/currency.  Ex. an Australian company that operates in Australian Dollars, buying car parts from a German company in Euros.

Check out more high level explanations of the FASB ASC in our Guide to the Accounting Standards Codification!

For more in depth information on this and other FASB ASC topics, check out the following books.

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