1, definition and scope
The accounting treatment of foreign currency transactions refers to the accounting treatment of transactions denominated in foreign currency, including recording foreign currency income, expenditure, debts and creditor's rights. It focuses on specific foreign exchange trading activities.
Accounting for foreign currency financial statements refers to the integration and conversion of accounting information of all foreign currency transactions into local currency and the preparation of corresponding financial statements in accordance with accounting principles and norms. It focuses on financial reporting based on foreign currency.
2, record the object
The accounting of foreign currency transactions mainly involves the foreign currency transactions themselves, such as foreign exchange trading, purchasing goods or services, borrowing or lending. These transactions are expressed in foreign currency amounts in accounting records.
The accounting of foreign currency financial statements covers all foreign currency transactions of the company, including assets, liabilities, owners' equity, income and expenses. The amount in financial statements is usually measured in local currency.
3. Accounting treatment
The accounting treatment of foreign currency transactions mainly includes foreign currency exchange, exchange rate difference, foreign currency accounts receivable and accounts payable. These transactions need to be calculated and converted according to the exchange rate to ensure correct recording.
The preparation of financial statements for foreign currency accounting requires foreign currency conversion and calculation of exchange gains and losses. By converting all foreign currency transactions into local currency, the value of corresponding items in financial statements is obtained.
4. Requirements of accounting standards
The accounting of foreign currency transactions shall conform to relevant international or national accounting standards, follow certain accounting principles and norms, and ensure accurate and complete records.
The preparation of financial statements for foreign currency accounting needs to be based on International Financial Reporting Standards (IFRS) or national financial reporting standards, such as Accounting Standards for Business Enterprises (CAS) in China. These standards provide uniform standards and regulations for financial statements.
5. Contents and disclosure of the statement
The accounting treatment of foreign currency transactions does not directly involve the preparation of financial statements, so in the accounting treatment stage of foreign currency transactions, no specific financial reports have been formed.
The financial statement of foreign currency accounting is the statement that finally reflects the company's financial position and operating results, including balance sheet, income statement, cash flow statement and statement of changes in shareholders' equity. These statements need to be compiled according to relevant standards and disclosed to internal and external stakeholders.
To sum up:
The accounting of foreign currency transactions mainly focuses on the accounting treatment of specific foreign currency transactions, while the accounting of foreign currency financial statements covers all foreign currency transactions, which are uniformly converted into local currency, and financial reports reflecting the company's financial status and operating results are compiled.
There are obvious differences between them in accounting treatment, scope and disclosure, but they are closely related, forming a complete foreign currency accounting system.