Hi all,
I'm doing an introductory accounting module in my undergraduate course and for a project we're supposed to analyse a company's financial report.
My question here is that what exactly is Currency translation difference?
How does it affect various elements in the various statements for example its affects on Returns, Allowance and Warranty for a merchandise company?
When do i credit or debit?
From my priliminary search i found this definition which wasnt of much help but gives a sense that currency translation difference arises due to accounts being held in foreign currency and an adjust needs to be made due to the currency fluctuation.
Currency transaction risk occurs because the company has transactions denominated in a foreign currency and these transactions must be restated into dollar equivalents before they can be recorded. Gains or losses are recognized when a payment is made or at any intervening balance sheet date.
http://www.journalofaccountancy.com/...ionAdjustments


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