BAR — Quick Sheet
Foreign Currency Translation
Read time: ~5 minutes
One-minute revision
- Translation (current rate method) → adjustment to OCI/CTA
- Remeasurement (temporal method) → gain/loss to earnings
- Current rate method: all assets/liabilities at year-end rate, income at average, equity at historical
- Temporal: monetary at current, nonmonetary at historical (inventory, PP&E, prepaid, equity)
- Foreign currency transactions → exchange gain/loss to earnings
- Highly inflationary economy → remeasure (earnings), don't translate