Foreign Exchange entries

[Monreal514]

What general guidelines do you guys you for handling foreign exchange entries? What do you guys do for trade payables? For revaluations? Does it all go to realized or does some go to unrealized as well?

 

[bklynboy]

Look at FAS 52 for US GAAP. Revaluations (translations) go through CTA with spot rate for balance sheet and weighted avg monthly rate for income statement (technically use rate when transaction occurred but practically this is difficult). Equity is historical and not translated. FX transactions create a gain or loss that is in net income (realized). There are some exceptions for FX transactions being outside of realized and this is mostly for effective hedges.

Do you have a specific example you need to work through?

 

[Monreal514]

Look at FAS 52 for US GAAP. Revaluations (translations) go through CTA with spot rate for balance sheet and weighted avg monthly rate for income statement (technically use rate when transaction occurred but practically this is difficult). Equity is historical and not translated. FX transactions create a gain or loss that is in net income (realized). There are some exceptions for FX transactions being outside of realized and this is mostly for effective hedges.

Do you have a specific example you need to work through?

Well, I have a predicament. At year end I have balances in my realized and unrealized that came from entries using different methodologies. That being said, is there a way to reverse engineer in order to get the appropriate balances? I assume there would be...any thoughts??