Foreign Currency Valuation as Related to Corporate Accounting

Date of Submission


Document Type


Degree Name

Master of Science in Accounting




Michael Rolleri


Corporations--Finance--United States, Foreign exchange, Foreign exchange--Accounting

Call No. at the Univ. of New Haven Library

AS 36 .N29 Acc. 1985 no.1


This thesis explains the development of foreign currency valuation and reporting from the Bretton Woods Agreement in 1944 to the estahlish- of F.A.S.B. No. 52 in 1982. The Bretton Woods system was established to stabilize international exchanges and to facilitate world trade. As a result of this Conference, the International Monetary Fund and the World Bank were created.

During the early 1970’s the U,S, dollar was devalued twice. These devaluations led to the development of F.A.S.B No 8. This pronouncement set standards of financial accounting in the financial statements of a foreign enterprise.

In 1982, a new standard, F.A.S.B. No 52 was adopted by the members of the Financial Accounting Standards Board. Foreign financial statements had to conform with Generally Accepted Accounting Standards and the functional currency of the entity had to conform with the primary economic environment of the entity.

The thesis then continues with the various accounting applications for single companies, subsidiaries and consolidations.

Forward exchange contracts are also covered. These specified rates protect companies from the risk of changing exchange rates. The thesis next covers the translation of foreign currency financial statements and their proper disclosure policies.

The summation of the thesis deals with the adoption of F.A.S.B No 52 in 1982 and the opinions of the business community.

The appendix was presented to demonstrate various examples of foreign currency reporting in corporate financial statements.