Term
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Definition
| the effect of changes in foreign currency values on a firm's future sales and future costs |
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Term
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Definition
| the process of restating financial information from one currency to another |
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Term
| a foregin currency asset of liability is said to be exposed to currency risk if a change in the rate at which currencies are exchagned causes the parent currency equivalent to change |
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Definition
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Term
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Definition
| the physical exchange of one currency for another |
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Term
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Definition
| simply a change in monetary expression, |
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Term
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Definition
| the price of a unit of one currency expressed in terms of another |
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Term
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Definition
| the exchange rate specifies the number of domestic currency units needed to acquire a unit of foregin currency |
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Term
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Definition
| the price of a unit of the domestic currency in terms of the foregin curerncy |
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Term
| transaction in the forward market |
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Definition
| agreements to exchange a specificed amount of noe currency for another at a future date |
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Term
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Definition
| the rate that the dealer would sell you foregin currency |
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Term
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Definition
| what the foregin exxchange dealer would pay you for foregign currency |
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Term
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Definition
| involves the simulatneous spot purchase and forward sale, or spot sale and forward purchase, of a currency; often used to take advantage of higher interest rates in a foregin country while simultanouely protecting themselves from ovements in foregn exchange rate |
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Term
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Definition
| the quantifiable characteristic of an item that is measured for accounting purpuoses |
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Term
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Definition
| the exchange rate in effect at the relevant finanical statement date |
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Term
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Definition
| when the forward exchange rate is below the current spot rate |
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Term
| exposed net asset position |
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Definition
| the excess of assets that are measured or denominstae din foregin currency and translated at the current rate over liabiltiies that are measured or denominated in foregin currency and translated at the current rate |
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Term
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Definition
| a currency oter than the currency of the country being referred to; a currency oterh than the reproting currency of the enterprise being referred to |
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Term
| forward exchange contract |
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Definition
| an agreement to exchange currencies of different countries at a specified rate (forward rate) at a specified future date |
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Term
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Definition
| the primary currency in which an entity does busienss and generates and spends cash; usually the currency of the country where the entity is located and teh currency in which the books of record are maintained |
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Term
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Definition
| the foregin exchange rate that prevailed when a foregin currency asset or liabity was first acquired or incurred |
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Term
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Definition
| obligations to pay or rights to recieve a fixed number of currency units int he future |
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Term
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Definition
| the currency in which an enterprie preapres its financial staements |
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Term
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Definition
| the exchange rate for immediate echagne of currencies |
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Term
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Definition
| result from the process of translating financial statements from the entity's functional currency into the reporting currency |
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Term
current rate
historical rate
average rate |
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Definition
| three exchange rates that can be sued to translate foregin currency blaances to domestic currency |
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Term
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Definition
| the echagne rate prevailing as of the finaical statement date |
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Term
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Definition
| the prevailing exchange rate when a foregin currency asset is first acquired or a foregin currency liabiilty first incurred |
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Term
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Definition
| a simple or weighted average of either current or historical exchange rates |
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Term
| use of historical exchange rates shields finanical statements from foregin currency tranlsation gains or losses |
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Definition
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Term
| gains or losses on settled transactions |
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Definition
| arise whenver the exchange rate sued to book the original transaction differs from the rate used at settledment |
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Term
| gains or lossess on unsettled transactions |
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Definition
| arise whenver financial statemnts are prepared before a transaction is settled |
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Term
| single transaction perspective |
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Definition
| exchnage adjusmtnes are trated as an adjustment to the orignial transaction accoutns on the premise that a transaction and its settlement are a single event |
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Term
| two transaction perspective |
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Definition
| collection of the receivable is consdiered a separate event from the sale that gave rise to it |
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Term
| those that use a single translation rate to restate foregin blances to their domestic currency equivalents and those that use multiple rates |
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Definition
| two trypes of translation methods |
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Term
| current non current method |
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Definition
| a foregin subsidiary's current assetes and current liabilites are translated into the paretn company's reporting currency at the current rate; noncurrent a&l are translated at thistorical rates |
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Term
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Definition
| currency tranlsation doesn't change the attribute of an item being measured; only changes the unit of measure |
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Term
| genreal price level change |
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Definition
| occurs when, on average, the prices of all goods and services in an economy cchange |
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Term
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Definition
| refers to a change in the price of a specific good or service caused by changes in demand and suppply |
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Term
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Definition
| adjustming asset values for changes in specific prcies |
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Term
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Definition
| the amount of a firm's net assets that could be withdrawn without reducing its beginnign elvel of net assets |
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Term
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Definition
| the benefit to shareholders' purchasing power gain from debt financing and signals that the firm need not recognize the additional replacement cost of oeprating assets to the extent they are financed by debt; "leverage" |
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Term
| general pruchasing power equivalents |
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Definition
| currency amounts that have been adjusted for changes in the gernal level of prices; historical cost constant currency |
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Term
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Definition
| increase in the current cost of a nonmentary asset |
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Term
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Definition
| an excessive rate of inflation, as wehn the general level of prices in an economy increase by > 25% per annum |
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Term
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Definition
| increase n the general level of prices of all goods and services in an economy |
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Term
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Definition
| a claim to a fixed amount of currency in the future, like cash or AR |
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Term
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Definition
| ncreases in genral purchasing power that occur when monetary liabilities are held during a period of inflation |
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Term
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Definition
| an obligation to pay a fixed amount of currency in the future, such as an account payable or debt that bears a fixed rate of itnerest |
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Term
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Definition
| decreases in general purchasing power that occur when moentary assets are held during a period of inflation |
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Term
| monetary working capital adjustment |
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Definition
| the effect of specific price changes on the total amount of working capital used by the business in its operation |
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Term
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Definition
| currency amounts that have not been adjustment for changing prices |
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Term
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Definition
| an asset that doesn't represent a fixed claim to cash such as inventory or plant and equipment |
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Term
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Definition
| a debt that doesn't require the payment of a fixed sum of cash in the future, such as a customer advance; here the obligation is to provide the customer a good or service whose value may change because of inflation |
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Term
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Definition
| an adjustment that reflects the difference in inflation between the parent and host countries |
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Term
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Definition
| a Brazilian term for fi assets, buildings investments, deferred changes and their respective depreciation, and depletion or amortization amounts |
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Term
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Definition
| a cost ratio where the numerator is the cost of a representative "basket" of goods and services in the current year and the denominator is the cost of the same basket of goods and services in a benchmark year |
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Term
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Definition
| the general ability of a monetary unit to command goods and services |
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Term
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Definition
| net income that has been adjusted for changing prices |
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Term
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Definition
| the current cost of replacing the service potential of an asset in the normal course of business |
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Term
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Definition
| used when a parent company consoidates the accounts of a foreign subsidiary located in an inflationary environment; the subsidiary's accounts are first restated for local inflation and then translated to the parent currency |
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Term
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Definition
| the change in the price of a specific commoity, such as inventory or equipment |
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Term
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Definition
| a consoliation method that first translates a foreign subsidiary's accounts to parent currency and then restates the translated amounts for parent-country inflation |
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Term
| understated asset values result in understated expenses and overstated income |
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Definition
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Term
| historical cost constant purchasing power model |
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Definition
| accounting for the financial statement effects of general price level changes |
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Term
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Definition
| accounting for the financial statement effects of specific price changes |
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Term
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Definition
| used to translate sums of money paid in past periods to their end of period purchasing power equivalents |
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Term
| price level adjusted current cost model |
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Definition
| employs both general and specific price indexes to account for changing prices |
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Term
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Definition
| when was the IASC created? |
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Term
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Definition
| foreign firms can prepare financial statements using home country accounting standards, but also must provide a reconciliation between critical counting measures of the home country and the country where the financial statements are being filed |
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Term
IASB
EU
IOSCO
IFAC
UN ISAR
OECD working group |
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Definition
| six organizations that have been key players in setting international accounting standards |
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Term
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Definition
| international private sector representative |
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Term
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Definition
| promotes the professional business development of financial markets |
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