Foreign Currency Transactions | Advanced Accounting | CPA Exam FAR

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This lecture covers foreign currency transactions. This is an advanced accounting topic.
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Distinguish between the terms measured and denominated. Transactions are normally measured and recorded in terms of the currency in which the reporting entity prepares its financial statements. Assets and liabilities are denominated in a currency if their amounts are fixed in terms of that currency. 2 Describe what is meant by a foreign currency transaction. A foreign currency transaction is a transaction that requires settlement in a foreign currency, not in U.S. dollars (for a U.S. firm).
Understand some of the more common foreign currency transactions. Some common transactions include: (1) importing or exporting goods or services on credit with the receivable or payable denominated in a foreign currency; (2) borrowing from or lending to a foreign company with the amount payable or receivable denominated in the foreign currency; (3) engaging in a transaction with the intention of hedging a net investment in a foreign entity; and (4) entering into a forward contract to buy or sell foreign currency.

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Thank you for creating this lecture series! I've found my Financial Accounting III textbook to be confusing and your videos help clarify the content I've read.

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Omg. I found this channel. Hopes this will help me. Imma watch this in next days. I'm having a hard time in Forex topic.

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[@levlev4460]

Thank you so much I have exams today and I'm struggling with foriegn currency this helps a lot

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[@abeehamakhi5148]

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I wish I knew about your lecturers before I wasted my money on Becker. Thanks so much for being so generous in explaining all the details!

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[@BAEESCOPE2010]

BECKER Study Material is good but the videos on FAR are horrible. They only tell you to highlight stuff which they might as well done while printing the textbook. Becker assumes you know all about FAR so does not bother to explain in depth at all.

[@danielleharpster3389]

Farhat realized gains

[@robernabamboo]

Thank you. Much better explanation than my lecturer

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[@soothyoursoul633]

That's a good lecture sir. Better than my text books. Much love all the way from Kenya. Subscribed definitely 👍

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[@jubayerahmedyean]

Your lessons are very helpful, i wish i could learn from you in person!

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[@sonjitroy4987]

Nice video. The transaction gain or loss at reporting date December 31 is unrealized . So I am confused whether FC gain or loss at reporting date should be shown in net income or OCI.

[@Chavez94565]

Right, in Becker's textbook it states that these translations would be unrealized. Therefore, I believe these gains and losses would be under OCI? 😕

[@Chavez94565]

Thanks for the video!! According to Becker these translations gains or losses are unrealized. So I am a bit confused if these would go under OCI or Net Income?

[@jonathanwieler8863]

Thank you for another excellent video!

[@AccountingLectures]

Thanks for watching! Please connect with me: linktr.ee/farhatlectures

[@jeffnichols3513]

What part of the income statement does the gain or loss appear? Other income or losses, cost of goods sold, sales revenues?

[@sabreenmehar3861]

Thank you so much sir , you make it easy to understand

[@AccountingLectures]

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[@harisakm6209]

Very helpful video thank you u sirr

[@AccountingLectures]

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[@user-sc2jx9bi3u]

What do I do if the software automatically calculates fx revaluation gain or loss on a monthly basis?

[@adebayokehinde2834]

What happens when the settlement date is the same as transactions date I.e. no payable or receivables?

[@kealebogaleburu5887]

Thanx very informative

[@AccountingLectures]

You are most welcome. Please subscribe and share. If you want to access more resources, check my website: ✔farhatlectures.com/ ✔Instagram: @farhatlectures ✔ Linkedin: www.linkedin.com/in/professorfarhat/ ✔Facebook:@accountinglectures ✔Twitter: @farhatlectures 🎤Email: [e-mail]

[@mjassar8603]

Like before watch

[@bhattdolly89]

Dear Sir, do you have any currency swaps (derivative video)? With accounting joural?

[@AccountingLectures]

Did you check my website?

[@itishripareek9694]

Firstly Thanks for all, sir is there any point in IFRS that i missed plz confirm - How long we can retain records ??

[@shannanthompson6875]

Hi, we have a GST Account due to Canadian dollar. The transactions are simlair to sales tax. Would this account be subject to gains and losses as well?

[@MaySan802]

Dear sir, thank you so much for your lecture. Could you please share us unrealized gain and loss lecture. 🙏🙏🙏

[@esethungiyana1860]

Thank you so much😊

[@AccountingLectures]

You are most welcome. Please subscribe and share. If you want to access more resources, check my website: ✔farhatlectures.com/ ✔Instagram: @farhatlectures ✔ Linkedin: www.linkedin.com/in/professorfarhat/ ✔Facebook:@accountinglectures ✔Twitter: @farhatlectures 🎤Email: [e-mail]

[@jubayerahmedyean]

Thanks sir

[@saverykong2149]

Great explaining!

[@AccountingLectures]

Glad it was helpful! Thank You. For more, visit my website at: www.farhatlectures.com

[@erdogangursum.]

❤❤❤❤❤❤

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[@NocteVertunumGaming]

Thanks, I learned a lot sir. Student from Philippines😄

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[@ruthvidal6466]

awesome instructor..thank u

[@AccountingLectures]

you are welcome.Please subscribe and share the website on your social media and connect with me on Facebook and LinkedIn: website: www.farhatlectures.com Facebook: facebook.com/accountinglectures/ LinkedIn: www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-245342

[@sumonsingha4417]

Hi sir, As u said in accounts receivables your home currency need to go down.... Bit confused on this... If home currencies go down then the exporter will pay less currency to acquire home currency.. Then its a total gain to exporter.. Please correct if i am wrong??

[@andraparasdyah5820]

No, exportir is company who sell commodities, so we receive payment. If local currencies are weaker, than we will receive lower money. Example, our A/R supposed to be $1000, but the exchange rate is decreasing to $900, than we loss $100, it will gain for importir but lose for exportir

[@marryreilly6032]

wow

[@AccountingLectures]

Most welcome: Here's my advanced accounting course: farhatlectures.pathwright.com/library/advanced-accounting-course-45909/94016/about/

[@ladev91]

I'm confused, my textbook says that the transaction adjustment at the balance sheet date causes a unrealized gain/loss.

[@adamasene9218]

It is unrealized as long as the transaction does not involve cash yet. Since it is receivables, the amount you will receive will depend on the exchange rate on the date the money will be received. All gains and losses incurred in between will have to be reported on the income statement as unrealized. the gain or loss can be temporary; It is only notional for now at least

[@MarS-bo9dp]

Thank you Mr. Farhats. My question is from where do we get the exchange rate? Threre is an official exchange rate dollar with other currencies? Thanks in advance.

[@AccountingLectures]

Supply and demand. You are welcome. Please subscribe and share the channel on social media. Please connect with me: Instagram: instagram.com/farhatlectures/ LinkedIn: www.linkedin.com/in/professorfarhat/ Facebook: facebook.com/accountinglectures

[@aliqureshi9966]

Hi, do your videos/lectures apply to Canadian students as well? Thanks a lot.

[@AccountingLectures]

Most topics do. You are most welcome. Please subscribe and share. If you want to access more resources, check my website: farhatlectures.pathwright.com Connect with me: Instagram Account: instagram.com/farhatlectures/ Linkedin: www.linkedin.com/in/professorfarhat/ Facebook: facebook.com/accountinglectures Twitter: twitter.com/farhatlectures Email: [e-mail]

[@swaybando3048]

Funny how the video was made on Nov 16 and im watching 2 years later on Nov 16

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[@youengland]

Sir, can a MTM ( valuation) on a financial instruments, be done on a daily basis or only on reporting. Thanks

[@AccountingLectures]

It can be done on daily basis. But what's the purpose?Please subscribe and share the website on your social media and connect with me on Facebook and LinkedIn: website: www.farhatlectures.com Facebook: facebook.com/accountinglectures/ LinkedIn: www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-245342

[@mjassar8603]

it should be OCI not in the NI ?? this is translation gian and loss ?? am i right >>??

[@AccountingLectures]

What is "it"?

[@llam9876]

May I know the transaction gain or loss in the first example is realized or unrealized gain or loss？is the $500 unrealized and $4441 is realized gain?

[@AccountingLectures]

The year-end G/L adjustment is unrealized. The settlement date transaction is realized. Please subscribe and share the website on your social media and connect with me on Facebook and LinkedIn: website: www.farhatlectures.com Facebook: facebook.com/accountinglectures/ LinkedIn: www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-245342

[@ladev91]

@@AccountingLectures you said that the gain/loss goes on the income statement. If it is unrealized doesn't it go on other comprehensive income. Also, if the gain is unrealized at year end, isn't the whole gain (from transaction date to settlement date) get recorded at the settlement date? You only show the gain from the balance sheet to the settlement date. I'm confused.

[@caasifsafder3403]

Best 👍👍👍👍

[@AccountingLectures]

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[@alkasoli4002]

I still don't understand the economy and financial world...each human does the same amount of work..but according to forex they're paid differently in different human made countries... that's the root cause of brain drain..why can't they pay equally all over the world?? In a world where basic human needs remain the same..

[@udyshine]

Please can someone me with my assignment 😢

[@xgum]

is it me or is this chapter skippable? maybe it's my cryptocurrency trading experience...