Foreign Currency Paper - For foreign-currency related transactions

Colorado State University Global Campus Foreign Currency Paper

You should refer to the FASB Accounting Standards Codification (FASB ASC), specifically, when answering some of the questions below:

1. For foreign-currency related transactions, whether they are accounts receivable or accounts payable denominated in a foreign currency, describe briefly how such transactions are recorded and reported on the income statement when the books are closed at the end of each accounting period, assuming there are outstanding foreign currency related balances receivable or payable at the end of the period.
2. Explain using an example when a firm would use a cash flow hedge to manage a foreign currency transaction. Be specific.
3. Explain using an example when a firm would use a fair value hedge to manage a foreign currency transaction. Be specific.
4. In a few sentences, explain the targeted improvements to the accounting for derivatives and hedged issued by the FASB in 2017 which are currently effective for financial reporting purposes.
5. Explain at least one major difference that exists today between US GAAP and IFRS on the accounting for foreign currency transactions. Be specific.

Requirements:

• Write a paper of 2-3 pages double-spaced in length, not counting the title and the reference page(s) and any Exhibit(s) or Appendices. Submissions in excess of 3 pages are acceptable.
• Use terms, evidence, and concepts from the Module interactive lecture and readings, including professional business language.
• Cite at least 3 credible, academic or professional sources for this assignment. The CSU Global Library (Links to an external site.) is a great place to find resources plus the FASB Codification.
• Use IN TEXT CITATION