The functional currency, also known as the functional currency, refers to the currency in the main environment where each unit is engaged in production, operation and business activities, and is a unified measure for each unit to measure its capital flow and operating results. Foreign currency refers to a currency other than the domestic currency, and usually refers to a currency other than the functional currency.
According to the provisions of the financial standards, all units should use RMB as the bookkeeping base currency, and units whose business income and expenditure are mainly in foreign currencies can also choose a foreign currency as the bookkeeping base currency, but they should be converted into RMB when submitting statements to relevant government departments.
2? Bookkeeping exchange rate and book exchange rate
Bookkeeping exchange rate refers to the exchange rate adopted by each unit when calculating and recording the business calculated in foreign currency. The bookkeeping exchange rate is divided into fixed exchange rate and variable exchange rate. The so-called fixed exchange rate refers to the bookkeeping exchange rate that remains unchanged for a certain period of time. For example, if the exchange rate 1 at the end of the current month or last quarter is adopted as the bookkeeping exchange rate, it will remain unchanged this month or this quarter. Variable exchange rate refers to the bookkeeping exchange rate that changes frequently according to the change of foreign exchange quotation. If the foreign exchange quotation of the day is used as the bookkeeping exchange rate, its bookkeeping exchange rate changes every day.
Book exchange rate refers to the registered exchange rate adopted by enterprises. The book exchange rate can be determined by FIFO method, transaction identification method, month-end adjustment method and weighted average method.
3? exchange gain or loss
Exchange gains and losses refer to the changes in foreign currency deposits, foreign currency loans and current accounts settled in foreign currencies and the translation difference between two different foreign currencies, including two meanings: first, the ending balance of foreign currency accounts is the difference between the amount converted into functional currency according to the foreign exchange rate of the country at the end of the period and the amount converted into functional currency according to the book exchange rate; Second, the difference of functional currency converted between different currencies.
4? Accounting principles for foreign exchange business
In accordance with the provisions of the financial accounting system, foreign exchange business accounting should follow the following principles:
(1) When an enterprise generates foreign currency cash, deposits, foreign currency claims and debts, it shall convert the relevant foreign currency amount into RMB for bookkeeping, and register the original currency amount and the conversion rate in the account.
(2) When an enterprise converts foreign currency into RMB for bookkeeping, the conversion rate can be the market exchange rate published by the People's Bank of China on the day when the business occurs, or the market exchange rate on the day of the current month, and then it is converted into RMB at the end of the accounting period. The difference between the adjusted RMB balance and the original book balance is treated as exchange gains and losses.
(3) When enterprises and institutions settle foreign exchange with banks, on the one hand, they are accounted for according to the amount of RMB paid by banks to the units, on the other hand, they are accounted for according to the amount of RMB calculated at the market exchange rate, and the difference between them is regarded as exchange gains and losses; When the company purchases foreign exchange from the bank, on the one hand, it records the decrease of bank deposits according to the actual amount of RMB paid, on the other hand, it records the decrease of accounts payable according to the amount of RMB converted at the market exchange rate.