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Two Transaction Approach required by GAAP: Sale/Purchase is separate from Credit decision, and related gains and losses must be accrued. Account US Entry Exchange Rate
Two Transaction Approach required by GAAP: Sale/Purchase is separate from Credit decision, and related gains and losses must be accrued. Account US Entry Exchange Rate December 1: 2 LCU = $1 Transaction 1) USCo sells product to Fco for $100,000. Product was in inventory at $80,000. Sale is made on credit, with 60-day terms. 2) USCo sells product to Fco for 200,000 LCU. Product was in inventory at $80,000. Sale is made on credit, with 60-day terms. 3) USCo buys product from Fco for $100,000. Purchase is made on credit, with 60-day terms. 4) USCo buys product from Fco for 200,000 LCU. Purchase is made on credit, with 60-day terms. 1) Transaction was denominated in US Dollars. December 31: 2.1 LCU = $1 (appr. of $) 2) Transaction was denominated in LCU's, and they have depreciated in value, so we have an unrealized Write A/R to the NRV. 200,000 LCU = $_ 3) Transaction was denominated in US Dollars. 4) Transaction was denominated in LCU's, and they have depreciated in value, so we have an unrealized Write A/P to the NRV. 200,000 LCU = $ 1) Transaction was denominated in US Dollars. January 31: 1.9 LCU = $1 (depr. of $) 2) Transaction was denominated in LCU's, and they have appreciated in value, so we have an unrealized Write A/R to the NRV. 200,000 LCU = $ (A/R balance was $2 3) Transaction was denominated in US Dollars. 4) Transaction was denominated in LCU's, and they have appreciated in value, so we have an unrealized Write A/P to the NRV. 200,000 LCU = $. (A/P balance was $ 1) Transaction was denominated in US Dollars. February 1: 1.9 LCU = $1 Credit Settlement 2) Transaction was denominated in LCU's, and they pay us 200,000 LCU's, received into our bank as $ 3) Transaction was denominated in US Dollars. 4) Transaction was denominated in LCU's, and we pay 200,000 LCU's, removed from our bank as $ Two Transaction Approach required by GAAP: Sale/Purchase is separate from Credit decision, and related gains and losses must be accrued. Account US Entry Exchange Rate December 1: 2 LCU = $1 Transaction 1) USCo sells product to Fco for $100,000. Product was in inventory at $80,000. Sale is made on credit, with 60-day terms. 2) USCo sells product to Fco for 200,000 LCU. Product was in inventory at $80,000. Sale is made on credit, with 60-day terms. 3) USCo buys product from Fco for $100,000. Purchase is made on credit, with 60-day terms. 4) USCo buys product from Fco for 200,000 LCU. Purchase is made on credit, with 60-day terms. 1) Transaction was denominated in US Dollars. December 31: 2.1 LCU = $1 (appr. of $) 2) Transaction was denominated in LCU's, and they have depreciated in value, so we have an unrealized Write A/R to the NRV. 200,000 LCU = $_ 3) Transaction was denominated in US Dollars. 4) Transaction was denominated in LCU's, and they have depreciated in value, so we have an unrealized Write A/P to the NRV. 200,000 LCU = $ 1) Transaction was denominated in US Dollars. January 31: 1.9 LCU = $1 (depr. of $) 2) Transaction was denominated in LCU's, and they have appreciated in value, so we have an unrealized Write A/R to the NRV. 200,000 LCU = $ (A/R balance was $2 3) Transaction was denominated in US Dollars. 4) Transaction was denominated in LCU's, and they have appreciated in value, so we have an unrealized Write A/P to the NRV. 200,000 LCU = $. (A/P balance was $ 1) Transaction was denominated in US Dollars. February 1: 1.9 LCU = $1 Credit Settlement 2) Transaction was denominated in LCU's, and they pay us 200,000 LCU's, received into our bank as $ 3) Transaction was denominated in US Dollars. 4) Transaction was denominated in LCU's, and we pay 200,000 LCU's, removed from our bank as $
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