国际会计 International Accounting 知识点总结 第三章

Chapter 3 Accounting for Currency Exchange Rate Changes，包含概述-术语、 外汇风险、汇率波动会计、在美国的外币折算等。

Chapter 3 Accounting for Currency Exchange Rate Changes

• 1. Overview - Terminology
  • Foreign Exchange
    • Direct Quote 直接汇率
      • the price of one unit foreign currency in exchange for domestic currency.
      • China/Canada/Japan
    • Indirect Quote 间接汇率
      • the price of one unit domestic currency in exchange for foreign currency.
      • UK/US/Australia
    • ask rate(sell rate, offer rate) 现汇银行卖出价
      • the price at which a financial institution is willing to sell a currency
    • bid rate(buy rate) 现汇银行购入价
      • the price at which a financial institution is willing to buy a currency
      • the spread
    • the spread 价差
      • difference between the bid and ask rates
  • Foreign Exchange Market
    • Definition
      • a mechanism through which the money of one country is exchanged for that of another, the exchange rate between currencies is set and exchange transactions are completed.
    • spot market
      • spot transaction 即期交易
        • immediate purchase or sale of foreign currency
    • forward market
      • Premium 溢价
      • Discount 折扣
      • currency option 货币期权
        • a contract that provides the right but not the obligation to trade a foreign currency at a set exchange rate or before a given date in the future.
      • currency swap 货币互换
        • a transaction that involves a simultaneous purchase and sale of two different currencies, with the purchase being effective and the sale back to the same party at a price agreed upon today but to be completed at a specified future date.
      • forward contract 远期交易
        • a commitment to exchange currencies in the future at a rate set today
  • Foreign exchange transaction 外汇交易
    • Two parties agree to exchange one currency for another at a specified rate of exchange.
  • Comparison
    • Foreign transaction 跨国交易
      • financial transation between other countries
    • Foreign currency transaction 外币交易
      • settlement in a foreign currency other than the company's functional currency
      • Transaction Gain/Loss → Affect the cash flows
    • Foregn currency translation 外币转换
      • process of expressing financial statement into another currency
      • No gain/loss
    • Foreign operation 跨国经营
      • activites in a country other than the reporting enterprise
  • Exchange Rates
    • Current Exchage Rate
    • Historical Exchage Rate
    • Average Exchage Rate
• 2. Exchange Exposure
  • Definition
    • A measure of the potential for a firm's profitability, cash flow, and market value to change because of a change in exchange rates
  • Translation exposure 转换风险
    • accounting exposure
    • The potential for an increase or decrease in the parent's net worth and reported net income, caused by a fluctuation in the exchange rates since the date of the previous period's consolidated financial statements.
  • Transaction exposure 交易风险
    • The potential fluctuation of exchange rates between the initiation of the transaction and the settlement of the invoice amount.
    • Classification
      • quotation exposure 报价风险
      • backlog exposure 积压风险
      • billing exposure 账单风险
    • Situation
      • buy/selling goods or services on credit, whose prices are contractually denominated in foreign currencies.
      • borrowing or lending funds in a foreign currency
      • engaging in contranct to buy or sell foreign currency at a future date
      • acquire assets or incur liabilities denominated in foreign currencies
    • gain/loss
  • Economic exposure 经济风险
    • the extent to which the value of the firm would be affected by unexpected changes in currency exchange rates
• 3. Accounting for Exchange Rate Fluctuations
  • transaction without credit
    • spot exchange rate
  • Credit transaction 赊销赊购
    • Single-transaction approach
      • Definition
        • be considered as an essential part of the transaction
        • The amount initially recorded is considered an estimate until the final settlement.
        • The original cost or revenue is adjusted for any difference
      • Entry
        • at transaction date
          • Dr. Account Receivable Cr. Revenues
        • at settlement date
          • Dr. Cash ····Revenues Cr. Accounts Receivable
      • for balance sheet dates
        • 初始交易日和资产负债表日之间，汇率发生的任何变动都要调整revenue (资产负债表日可以直接用retained earnings)
        • 在资产负债表日和交易完成日之间，汇率发生的变动需要额外调整。
    • Two-transaction approach
      • Definition
        • be considered as a second transaction
        • The amount is distinct from the original transation to buy or sell goods or services
        • The original cost or revenue isn't adjusted, any difference would be treated as a foreign currency transaction gain or loss.
      • Entry
        • at transation date
          • Dr. Account Receivable Cr. Revenues
        • at settlement date
          • Dr. Cash ····Loss on Foreign Exchange Cr. Accounts Receivable
          • Dr. Cash Cr. Gain on Foreign Exchange ····Accounts Receivable
      • for balance sheet dates
        • 现金资产要按资产负债表日的汇率调整
        • 按公允价值入账的非现金资产应该按照确定公允价值时的汇率入账
  • Foreign currency debt
    • Debt record
      • 借款最初按即期汇率以美元入账。
      • 在随后的资产负债表日，借款必须按当日汇率以美元重新计量，由此产生的汇兑损益必须立即记入损益表
    • Paying expenses
      • 由于利息会提前进行计提，并在后续特定日期支付，导致最后支付日的汇率与利息累计期的平均汇率之间的差额可能会产生外汇损益。
      • average exchange rate → interest expense
      • payment date exchange rate → cash
      • difference → foreign exchange gain/loss
  • Foreign currency translation 外币转换
    • Terminology
      • Current rate
        • the exchange rate prevailing at the balance sheet date
      • Historical rate
        • the exchange rate prevailed at the date on which a specific transaction occured
      • Average rate
        • a weighted average of the exchange rates prevailed during the period for which financial statements are being prepared.
    • Accounting issue
      • Single rate method
        • Current Rate Method
          • assume all assets and liabilities face currency risk
          • Overview
            • the easiest to apply
            • results in translated statements that retain the same ratios and relationships with local currency
            • gain or loss don't affect the income statement, a cumulative translation adjustment (CTA) in the year end Equity in the balance sheet,
      • Multiple rate methods
        • Monetary/Non-monetary Method
          • assume only the monetary items face currency risk
          • Overview
            • the supporters think it is more meaningfull to translate assets and liabilities on the basisi of attributes instead of time
            • gains or losses are included in the income statement and affect the company's earnings
        • Current/Non-current Method
          • assume only the current items face currency risk
          • Overview
            • was used in US at 1930s - 1970s when SFAS No.8 become effective
            • entirely unrelated to the economic effects of exchange rate fluctuations
            • gains or losses are included in the income statement and affect the company's earnings
        • Temporal Method
          • adjust balance sheet items according to the valuation basis used in financial statements
          • Overview
            • was originally proposed in Accounting Research Study 12 by the AICPA
            • was formally required in Statement No.8
            • gains or losses are included in the income statement and affect the company's earnings
    • Format
• 4. Foreign Currency Translation in the US
  • Historical Development
    • In the early 1930s, the US used current/non-current method
    • In the late 1960s to early 1970s, the accounting principles board (APB) was studying the translation issue
    • In 1972, Accounting Research Study 12 was issued.
    • In December 1973, FASB issued Statement No.1, "disclosure of foreign currency translation information,"
    • In October 1975, FASB issued Statement No.8, "accounting for the translation of foreign currency transactions and foreign currency financial statements", to be effective in January 1, 1976
    • In December 1981, Statement No.52, foreign currency translation, was issued.
  • FASB No.52: Functional Currency
    • The currency of the primary economic enviroment in which the foreign subsidiary operates and generates cash flows.
    • Foreign subsidiary financial statement to be translated to dollars
      • in dollars
        • No tanslation required
      • in foreign currency
        • Local currency is the functional currency
          • If the local currency is determined to be the foreign subsidiary's functional currency, using the current rate method.
          • using Current Rate Mehod translate to dollars
        • Local currency is not the functional currency
          • dollar is the functional currency
            • If the US dollar is deemed to be the functional currency of the foreign subsidiary, using the temporal method.
            • using Temoral Method translate to dollars
          • dollar is not the functional currency
            • If the functional currency is neither local currency nor the dollar, a two step tranlation process. The local currency to the functional currency using the temporal method; the functional currency to the US dollar using the current rate method.
            • using Temporal Method translate the local currency to the functional currency
            • using Current Rate Method translate the functional currency to the dollar
    • Format
    • Three Major Changes
      • allow multiple units of measure so that differing economics situations can be accounted for differently
      • required translation gains/losses under the current rate method to be taken directly to Equity in the SOFP by passing the SOPL.
      • created the concept of functional currency as the determining factor of the translation method to be used
    • Translation in highly inflationary economics
      • In hyperinflationary situations, the reporting currency of the parent must be designated as the functional currency.
        • Temporal Method
  • IAS No.21
    • The FS of subsidiaries in highly inflationary economies must be adjusted to reflect changes in general price levels before translation.
  • SFAS No.133: Derivative Instrument
    • A financial instrument or other contract
    • Characteristics
      • It has one or more underlyings and or more notional amounts or payment provisions or both
        • underlying 底层证券
        • notional amount 名义价值
        • payment provision 付款条款
      • It requires no initial net investment or an initial net investment is very small.
      • It's terms requires or permit settlement in the future.
    • Forward contract
      • not designated as a hedge
      • designated as a hedge
    • measured at fair value