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SFAS No.
14
The Effects of Changes in Foreign Exchange Rates |
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 Status |
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Revised by
the Financial Accounting Standards Committee in Taiwan on 22
September, 2005. |
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Summary |
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Scope |
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The purpose of this Statement is to
establish the accounting standard for foreign |
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currency transactions, and for the
translation of financial statements of foreign |
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operations into financial statements
denominated in the reporting entity's currency. |
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Foreign currency transaction |
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Exposed assets, liabilities, revenues
or expenses resulting from foreign currency |
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transactions should be recorded at the
current spot rate of the transaction date and |
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at the balance sheet date. Gains or
losses from re-measurement and settlement of |
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exposed assets or liabilities should
be recognized as current period gains or losses. |
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Translation of foreign financial statements |
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The financial statements of a foreign
operation should first be remeasured into the |
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functional currency. The gain or loss
from the remeasurement is reported as a |
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component of net income. The financial
statements of a foreign operation should then |
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be translated into the reporting
entity's currency. Exchange gains or losses resulting |
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from the translation should be
recorded as Translation Adjustments, which is a separate |
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component of stockholders' equity. |
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Disclosure |
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The following items related to the
Cumulative Translation Adjustments account should |
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be disclosed: |
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1. beginning
and ending balance of the cumulative translation adjustments; |
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2. translation
adjustment from current period; and |
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3. amounts transferred from cumulative
translation adjustments and included in net |
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income of the
period. |
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Effective
date
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This statement becomes effective for
financial statements for the fiscal year ending on
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or after December 31, 1989. |
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