La Tareas

Statement of Financial Accounting Standards No. 1
Note: This Statement has been completely superseded FAS1 Status Page FAS1 Summary

Disclosure of Foreign Currency Translation Information
December 1973

Financial Accounting Standards Board
of the Financial Accounting Foundation 401 MERRITT 7, P.O. BOX 5116, NORWALK, CONNECTICUT 06856-5116

Copyright © 1973 by Financial AccountingStandards Board. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the Financial Accounting Standards Board.

Page 2

Statement of Financial Accounting Standards No. 1 Disclosure of Foreign CurrencyTranslation Information December 1973 CONTENTS Paragraph Numbers Introduction ................................................................................................................. 1– 4 Explanation of Terms ....................................................................................................... 5 Standards ofDisclosure.................................................................................................... 6 Effective Date................................................................................................................... 7 Appendix A: Background Information Summary of Pronouncements and Practices ........................................................ 8–17 Summary of ResearchFindings................................................................................ 18 Summary of Considerations of Comments on Exposure Draft .......................... 19–25 Appendix B: Examples of Disclosure ..................................................................... 26–32

Page 3

FAS 1: Disclosure of Foreign Currency Translation Information

INTRODUCTION
1. The Financial Accounting Standards Board (FASB) currently has the subject ofaccounting for foreign currency translation on its technical agenda. As part of that project, the FASB will examine the alternative methods of accounting for foreign currency translation. At the completion of that project, the FASB expects to issue a comprehensive Statement specifying the financial accounting and reporting standards to be applied. The disclosures required by this Statement shouldnot be interpreted to imply that any accounting method is more or less acceptable than any other method. 2. Under existing pronouncements of the Accounting Principles Board (APB) and its predecessor, several significantly different alternatives are acceptable in accounting for foreign currency translation (see Appendix A). These pronouncements, however, are lacking in specific disclosurerequirements. A recent survey 1 of foreign currency translation practices indicates that various accounting methods are used. The survey also indicates that a significant proportion of the companies surveyed presented incomplete disclosures of translation methods and the disposition of translation adjustments. Research conducted by the FASB staff supports those findings of the survey. (See paragraph 18.) 3.Because of (a) continuing realignments of exchange rates, (b) the number of accounting alternatives available, (c) the diversity of practice, (d) the lack of specific disclosure requirements in existing accounting pronouncements, and (e) the limited amount of information concerning translation practices presently being disclosed by some companies with important foreign operations, the FASB hasconcluded that more specific disclosure of current practices in foreign currency translation is now needed. 4. The disclosures required by this Statement are designed to provide information concerning a company's translation practices to facilitate assessment of possible implications with respect to its financial position and results of operations. This Statement does not supersede, alter, or amend...