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Foreign currencies

  • Chapter
UK Gaap

Abstract

A company can engage in foreign currency operations in two ways. It may enter directly into transactions which are denominated in foreign currencies, the results of which need to be translated into the currency in which the company reports. Alternatively, it may conduct foreign operations through a foreign enterprise, normally a subsidiary or associated company, which keeps its accounting records in a foreign currency and, in order to prepare consolidated financial statements, will need to translate the financial statements of the foreign enterprise into its own reporting currency.1 Accounting for these translation processes has been one of the most significant problem areas in financial reporting in recent years.

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Authors and Affiliations

  1. Ernst & Young, USA

    Mike Davies, Ron Paterson & Allister Wilson

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  1. Mike Davies
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  2. Ron Paterson
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  3. Allister Wilson
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© 1992 Ernst & Young

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Davies, M., Paterson, R., Wilson, A. (1992). Foreign currencies. In: UK Gaap. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-12998-0_5

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