Major Issues Generating the Need of Translation Accounting Practices

Abstract

The economy is expanding at a huge growth rate and international trade, free flow of investment from one country to another country and increase in multinational operations make a company to deal in more than one currency, so the problem of accounting treatment of foreign currency translation and foreign currency transactions arise. This paper is a simple effort to highlight the major issue because of which translation practices are highly needed. The paper is divided into five sections, three sections are covering the three major issues i.e. increase in international trade, high flow of FDI to and from India and expansion in number of MNCs day-by-day. Section IV is concerned with how the Translation Accounting Practices emerged. Section V provides the overview of the translation accounting practices in different countries.