BUS 420 Lecture Notes - Lecture 1: Canadian Dollar, Accounts Payable, Financial Statement
Document Summary
This chapter focuses on accounting issues on foreign currency transactions and foreign currency hedging. The subsequent chapter covers the translations of foreign currency financial statements of a foreign operation. The following major topics are covered in this chapter: translations of foreign currency transactions and related balances denominated in foreign currency, hedge accounting. Chapter outline: translation of foreign currency transactions, introduction. Many canadian companies conduct business in foreign countries as well as in canada. No specific accounting issues arise when the parties involved in an import or export transaction agree that them payment will be in canadian dollars. Since it is a canadian dollar denominated transaction, the company will record the foreign purchase or sale in exactly the same manner as any domestic purchase or sale. When the agreement calls for the transaction to be settled (paid) in foreign currency, this means one of the two things: