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Foreign Currency Translation and the Behavior of Exchange Rates
Robert G. Ruland and Timothy S. Doupnik
Journal of International Business Studies
Vol. 19, No. 3 (Autumn, 1988), pp. 461-476
Published by: Palgrave Macmillan Journals
Stable URL: http://www.jstor.org/stable/155136
Page Count: 16
You can always find the topics here!Topics: Purchasing power parity, Exchange rates, Currency, Monetary liabilities, Accounting interpretations, Financial accounting, FASB standards, Economic value, Economic inflation, Inflation rates
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Two major controversies exist in the translation of foreign currency financial statements: (1) which translation method should be used, and (2) how should the resulting translation gain or loss be reported. This paper proposes and implements two criteria for resolving these issues in which the appropriate combination is determined by examining the behavior of exchange rates. Application of these criteria would yield translation policy substantially different from that required under current accounting rules.
Journal of International Business Studies © 1988 Palgrave Macmillan Journals