ASC 830-10 provides basic guidance on foreign currency issues. This guidance includes how a reporting organization decides what the functional currency (the main currency that a company uses in its business) of a foreign company. If needed it remeasures the record books, and distinguishes transaction gains and losses (Deloitte, n.d.). FASB codification ASC 830-20 sets up the standards regarding financial accounting and reporting for foreign currency transactions in financial statements of a reporting company (Deloitte, n.d.). Under ASC 830, all foreign currency transactions must be measured in the recording entitys functional currency by using the exchange rate in effect on the date on which the transaction is recognized (Deloitte, 2020). ASC specifies that if a recorded balance is denominated in a foreign currency, it must be remeasured in each period into the functional currency by using the current exchange rate. The changes in those recorded balances, which result from fluctuations in the current exchange rate, are generally recorded in earnings (Deloitte, 2020). ASC 830-10-45-17 states that to comply with the requirements in ASC 830-20 regarding the subsequent accounting for foreign currency transactions, an entity must use historical exchange rates to remeasure some accounts and current exchange rates to remeasure others (Deloitte, 2020). This guidance further suggests that monetary assets and liabilities would be subject to re-measurement at current exchange rates.

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