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Individual Foreign Transactions

Foreign Transactions

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#1 Kookie05



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Posted 12 July 2014 - 03:48 PM

I'm reading Becker book - FAR2-52 (Chapter 2, page 52), and it says:  "The assets or liabilities resulting from foreign currency transactions should be recorded in the U.S. company's books using the exchange rate in effect at the date of the transaction."


I would take that to mean...they should be valued at their respective HISTORICAL RATEs


However there is also a paragraph (paragraph D) and example suggesting that your assets/liabilities be valued MARKED TO MARKET (i.e. FAIR MARKET VALUE) = CURRENT EXCHANGE RATE


Can someone help me make sense of chapter 2, page 52, paragraph letter E please?  Are assets valued marked to market...or at historic rates.