Foreign Currency Transactions Research Articles

Currency calculations during the war

Introduction. The introduction explores the impact of war on foreign economic activity and currency transactions in Ukraine. It examines how the war influences the Ukrainian economy, emphasizing the importance for businesses to be aware of changes in currency transactions during times of war. The purpose of the paper is to analyze restrictions on currency transactions during the state of war in Ukraine and potential penalty sanctions for violations of currency legislation. Results. Currency transactions in Ukraine during the war impact a significant sector of the economy and the lives of the country's citizens. To ensure financial stability, the National Bank of Ukraine and the government have implemented a series of measures, creating challenges for businesses and the population. These measures include changes in the currency exchange rate, restrictions on the issuance of foreign currency, and limitations on cross-border transfers, and others/ Conclusions. During the period of martial law, currency transactions have faced significant challenges and changes. The National Bank of Ukraine and the government have implemented and continue to implement a series of measures to ensure stability in the currency market and mitigate the negative impact of the war on Ukraine's financial system. To minimize the adverse effects, restrictions on cash withdrawals, issuance of funds in foreign currency, cross-border currency transfers, and more have been introduced. Equally important, all economic ties with the aggressor country have been halted. Over the years of war, it has become clear that control over currency transactions plays a crucial role in ensuring economic stability. In turn, businesses need to monitor all these changes implemented by the country's leadership to continue developing successfully and contribute to the growth of our country's economy.

Analisis Perlakuan Akuntansi dalam Transaksi Mata Uang Asing terhadap Risiko Keuangan PT. Ramayana Lestari Sentosa Tbk

This research aims to determine foreign currency transactions that occur at PT. Ramayana Lestari Sentosa Tbk in its financial reports is because countries have different currency values. Foreign currency transactions at this company involve the sale and purchase of currency to support business needs and control company risks. The data collection technique used in this research is a qualitative descriptive method. The results of the discussion stated that, PT. Ramayana Lestari Sentosa Tbk noted that foreign currency transactions occur due to import-export, foreign funding and foreign investment. Foreign currency transactions are important in company risk management as a source of good financial strategy.

Implementasi PSAK 10 dalam Menyusun Laporan Keuangan (Transaksi Mata Uang Asing)

Accounting for foreign currency transactions is an important aspect in the scope of corporate finance, especially in the context of business globalization. PSAK 10 (Statement of Financial Accounting Standards) regulates this aspect and provides guidelines on how companies should account for transactions in foreign currencies as well as related financial reporting. This research explores the implementation of PSAK 10 in preparing financial reports, with a focus on foreign currency transactions. In PSAK 10, companies are directed to use the foreign currency exchange rate on the transaction date to measure transactions in foreign currency. In addition, significant changes in foreign currency exchange rates after the transaction date are also taken into account and recognized as exchange gain or loss. A deep understanding of the application of these provisions is crucial so that financial reports accurately reflect the company's financial position. Through literature research and analysis of accounting practices, this article investigates how companies effectively manage foreign currency risks and present relevant and reliable information in their financial reports. A comparison between the methods used by companies in implementing PSAK 10 and best practices in the industry is explained to provide a comprehensive picture. It is hoped that the results of this research will provide in-depth insight into the challenges, opportunities and best policies in dealing with foreign currency transactions based on PSAK 10. The practical implications of compliance with this standard, as well as the potential impact on corporate financial decisions, will also be reviewed. With a better understanding of foreign currency transaction accounting, companies are expected to improve the quality and credibility of their financial reports in an ever-expanding global market.

The Impact Of Accounting Standards for Foreign Currency Transactions and Financial Statements Translation on Auditing Procedures: The Case of Iraq

This paper aims to convey the notion of auditing, its relevance, and the report's function in strengthening the recipients' trust. It also tries to study accounting rules for foreign currency transactions and interpret and unify financial statements for overseas entities. The research aims to study and analyze accounting for foreign transactions and the translation of financial statements in public sector corporations, the research sample, and compare these accounting treatments with those that should be included in the relevant accounting standards. The objective meaning of the word auditing is based on the fact that auditing is a search for the truth since this is the core of the auditing process. Auditing is fundamental to all operations, and its presence dates back to antiquity and the first civilizations. This study aims to shed light on the concept of foreign transactions, the translation of financial statements, the presentation and discussion of problems arising from them, the accounting standards for accounting for transactions in foreign currency, the translation and consolidation of financial statements for foreign units, their impact on auditing operations and what is reflected in the auditors' report. In addition to investigating the reality of accounting for transactions in foreign currency and translating the financial statements of public firms, the sample research also examines the validity of accounting for transactions in foreign currency. The findings indicate that the financial statements of the public sector enterprises comprising the study sample do not fairly represent their work and financial status outcomes.

John Franklyn Venner FCA: An Orthodox Chartered Accountant Working in an Unorthodox Organization

ABSTRACT John Franklyn Venner was a chartered accountant and senior partner in an eminent City of London firm of accountants. However, between 1940 and 1945, Venner worked at the heart of the unorthodox and top secret Special Operations Executive (SOE), which was set up to facilitate clandestine warfare. Venner used the accounting orthodoxy of financial controls, the recording of transactions, and regular financial reporting to build a strong bond of trust and confidence with the Treasury and Bank of England. This provided space for Venner to develop unorthodox financing schemes, including black market foreign currency transactions, which generated millions of pounds of currency and made a major contribution to the war effort. Venner died in 1955 at age 52. This biographical microhistory, using archival sources, brings his story out of the shadows and demonstrates how an eminent chartered accountant navigated the unorthodox world of the SOE during the Second World War. Data Availability: All data used are available from the public sources cited in the text, apart from the transcripts of the two James Venner interviews.

Accounting Treatment of Prepayments (Payments) for Foreign Currency Transactions Under IAS 21 and IFRIC 22

Accounting Treatment of Prepayments (Payments) for Foreign Currency Transactions Under IAS 21 and IFRIC 22

LỰA CHỌN PHƯƠNG PHÁP HẠCH TOÁN TỶ GIÁ ĐỐI VỚI CÁC GIAO DỊCH BẰNG NGOẠI TỆ SELECTING THE EXCHANGE RATE ACCOUNTING METHOD FOR FOREIGN CURRENCY TRANSACTIONS

Accounting for foreign currency transactions has been guided by current standards and accounting regime, but its implementation in businesses is quite complex and challenging. This article investigates and provides recommendations on the selection of accounting methods related to foreign currency transactions and serves as a reference documents for businesses with foreign currency transactions. Keywords: Accounting for foreign currency transactions, exchange rates. JEL Classifications: M40, M42, M49

Exchange rate risk management of foreign trade enterprises

Global economic integration is expanding worldwide, and each country's potential and extent of exchange rate volatility will become more significant with changing national policies. As a result of engaging in import and export business, foreign trade enterprises have a large volume of foreign currency transactions and holdings. Foreign trade enterprises in every country need to raise their awareness of exchange rate risk management. Import and export enterprises must avoid exchange rate risks in various ways to ensure minimum losses and maximum profits. This article examines how foreign trade enterprises can manage exchange rate risk in a way that enables them to avoid exchange rate risk and thus ensure stable business returns. Following a logical relationship and structure, it uses the literature research method to introduce how companies need to respond to changes in exchange rates internally. It also introduces how companies can control exchange rate risk through financial instruments.

Multinational Accounting: Foreign Currency Transactions and Financial Instruments

Multinational Accounting: Foreign Currency Transactions and Financial Instruments

Risks Facing Russian Stock Exchange during Sanctions and Ways of their Overcomin

The article deals with problems facing Russian stock exchange in conditions of sanctions imposed by western states on organizations and individuals of the Russian Federation. They are harmful and affect key financial institutions of Russia, thus they are bound to impact the stock market experiencing turbulence since late February 2022. In order to cut the adverse influence of such measures both the government and the regulator (the Central Bank of the Russian Federation) have to response by tough decisions aimed at stabilizing the situation in finance sphere, among which we should mention a sharp rise in the key interest rate, closing stock trading on the Moscow exchange, restrictions on foreign currency transactions and interventions on stock market. The article highlights problems that caused serious fluctuations of currency rate on commodity and foreign exchange markets brought about by unstable political situation in the world. The authors evaluated prospects of further movements of market and possible countermeasures, which should be taken both by the Russian government and the regulator to smooth negative after-effects in country economy.

Policies for transactional de-dollarization: A laboratory study

Partial currency substitution typically occurs in small open economies amid economic crises. Often, the foreign currency continues to circulate even after macroeconomic stability returns. Central banks have responded by applying de-dollarization policies. We extend the model in Matsuyama et al. (1993) and implement an experiment to study the effectiveness of two policy instruments: (1) taxes on domestic transactions in foreign currency and (2) a reduction in the storage cost of local currency. We contribute to the theoretical literature by characterizing a new circulation regime for small open economies where agents use the foreign currency solely for international trade and settle domestic transactions exclusively in local currency. Our experimental evidence suggests that both taxes and storage cost reductions can foster de-dollarization as they reduce foreign currency acceptance and reinforce the use of local currency. However, we find that the impact of a reduction in the storage costs of the local currency is more significant and robust. It lowered the acceptance rate of foreign currency by more than 20 percentage points and increased the acceptance of local currency by more than 30 percentage points. On the other hand, the tax policy reduced foreign currency acceptance by a smaller amount and only for encounters with foreign agents.

АНАЛІЗ ПРОЦЕНТНИХ ТА КОМІСІЙНИХ ВИТРАТ |БАНКІВСЬКОЇ УСТАНОВИ

The article is devoted to the analysis of interest and commission expenses of a banking institution. Analysis of the dynam-ics and structure of the bank's income, the overall assessment of their level was carried out on the example of the joint-stock company "State Savings Bank of Ukraine". Structural and dynamic cost analysis made for five years, namely 2017–2021 on the basis of separate financial statements of the joint-stock company "State Savings Bank of Ukraine" and the report of the indepen-dent auditor for 2017–2020 and interim condensed separate financial statements for nine months , which ended on September 30, 2021. Structural-dynamic analysis was used for the analysis, the purpose of which is to determine the share of a particular type of costs in the total amount. The article presents a structural analysis of the costs of JSC "State Savings Bank of Ukraine" for the last 5 years, namely interest, commissions and operating. The article analyzes the dynamics of interest expenses of JSC "State Savings Bank of Ukraine" for the last 5 years, namely interest on customer accounts, interest on loans received from international and other financial organizations, interest on other borrowed funds, interest on subordinated debt, interest at the expense of banks, interest on lease obligations. The article analyzes the dynamics of commission expenses of JSC "State Savings Bank of Ukraine" for the last 5 years, namely transactions with plastic cards, settlement and cash transactions, foreign cur-rency transactions, securities transactions. The article analyzes the structure of operating costs of JSC "State Savings Bank of Ukraine" for 2017–2021, namely wages and bonuses, depreciation of fixed assets and intangible assets, maintenance of fixed as-sets, payroll, communication services, utilities services, taxes, except corporate income tax, office expenses, security expenses, professional services, operating rent, insurance expenses, advertising expenses, travel expenses, other operating expenses. The article proposes measures to minimize the costs of JSC "State Savings Bank of Ukraine".

Difference of Gain and Loss on Currency Translation and Conversion

This article discusses the advantages and disadvantages of translation and conversion of currency. Foreign currency translation is the process of reporting financial information from one currency to another. Foreign currency transactions take place on the spot, forward, or swap markets. Currencies bought or sold on the spot generally have to be delivered as soon as possible, that is, within 2 working days. Foreign currency translation is carried out to prepare joint financial reports. Translation is simply a change in monetary units, just as a balance sheet expressed in British pounds is restated into its US dollar equivalent. No physical exchange takes place, and no related transaction occurs as if a conversion were made.

The effects of eliminating Riba in foreign currency transactions by introducing global FinTech network

Purpose This paper aims to investigate the effects of eliminating Riba in foreign currency transactions. Riba or interest arises when foreign currencies are bought and sold at different rates. From the Islamic perspective, the difference between the buying and selling rates of foreign exchange will constitute Riba. Also, this paper examines the effects of eliminating such Riba on major macroeconomic variables. Design/methodology/approach This study is based on the hadith which imply that if buying and selling rates of currencies or foreign exchanges are same, i.e. if one sells BD1 = Dh10 and Dh10 = BD1 on spot, there will be no Riba. This can be guaranteed if the Islamic banking system introduces the technology, often known as FinTech interest-free foreign exchange bank machines (IFfexBM), which will automatically dispense BD10 for Dh100 and vice-versa, both locally and globally, and it will have tremendous positive effects in the economy. Furthermore, the effects of introducing FinTech for eliminating Riba will be analyzed on economic and international trade activities by using aggregate expenditure (AE) and aggregate output model within the tenets of Islamic principles. Findings If Islamic banks (IBs) can introduce FinTech global network system where any client can buy or sell foreign currency at the same rate without any markup, it will increase the market share for IBs by increasing the number of customers and number of branches, and it will increase the inflow of funds and volumes of transactions, especially in international trade, global financial transactions and cross-border shopping. Such an increase in transactions will increase AE and AE will continuously shift up. Such an upward shift will have positive effects on equilibrium output, employment and prosperity. Originality/value This is, perhaps, one of the latest attempts to eliminate Riba from foreign exchange transactions by introducing FinTech IFfexBM in each and every locality. Such elimination of Riba will not only reduce the cost of cross-border transactions but it will also reduce cost in international trade and financial transactions among nations, and therefore, it will have expansionary effects on equilibrium output, employment and global prosperity.

Policies for Transactional De-Dollarization: A Laboratory Study

Partial currency substitution occurs typically in small economies amid economic crises when the local currency loses some of its essential functions, and foreign currency, usually the US Dollar, is widely adopted. Interestingly, the coexistence of two currencies often persists after macroeconomic stability has returned, which imposes challenges to the conduct of monetary policy. Central banks have responded by applying de-dollarization policies. This paper studies the effectiveness of three of them: (1) taxes on transactions in foreign currency among domestic agents, (2) storage costs on foreign currency holdings, and (3) information on the acceptance rate of the foreign currency among local agents. We extend the model in Matsuyama et al. (1993) to study the effects of these policies, both theoretically and experimentally. We contribute to the theory literature by characterizing a new circulation regime where agents use the foreign currency solely for international trade and settle domestic transactions exclusively in local currency. Our experimental evidence suggests that both taxes and storage costs reduce the overall acceptability of foreign currency in international and domestic transactions (around 40 percent in both cases). Information treatment does not have a significant impact relative to baseline.

IAS 21 - The Effects of Changes in Foreign Exchange Rates: A Review of Concepts and Related Issues

As interaction of companies across borders increases, accounting for foreign exchange transactions as well as translation of financial statements has become an important topic. An entity is exposed to foreign exchange gains or losses through investments or balances in a foreign currency or ownership in a foreign operation. In order to assess these risks and the related impact, foreign currency transactions and balances should be accounted accurately. IAS 21 aims to set the framework for inclusion of foreign currency transactions and foreign operations in the financial statements of an entity and translation of financial statements into a presentation currency. Foreign exchange transactions and translations inevitably affect an entity’s net income and/or other comprehensive income. Despite IAS 21 setting the framework for accounting for these effects, management still may use some judgement in practice. When analyzing financial statements, users of information should be aware of the underlying methods used for accounting for exchange rate differences since results of analysis of financial statements is largely dependent on these methods.

Crypt currency as an object of accounting

One of the innovations of recent times has been the discovery of a special kind of currency, called "cryptocurrency". Today, this phenomenon has become a global phenomenon known to most people, including in Ukraine, as a result of the crisis in the domestic banking system, the volatility of the hryvnia, the volatile exchange rate and other difficulties faced by business. At the same time, most authors mainly consider the technical aspects of cryptocurrency mining. However, one-sided research from the point of view of describing the technical model of operation does not allow to reveal their essence as an economic category, and also hinders the rapid establishment of adequate institutional standards, regulatory procedures for emission and exchange. As a result, there was a certain imbalance - economic innovations outstripped the development of legislation that would regulate the relationship between entities in the field of payments and payments in cryptocurrency. Lack of legal support causes considerable difficulty to reflect cryptocurrency transactions in financial accounting. The purpose of the article is to determine the features of accounting cryptocurrency in enterprises. We have determined that cryptocurrency is not a type of electronic money, but is a completely new economic category, so it is necessary to include a sub-account 336 "Cryptocurrency" in the Accounts Plan. The attribution of cryptocurrency to the composition of electronic money is impractical because there are significant differences between these concepts: decentralized nature, mining method of mining, anonymity, etc. Cryptocurrency has its advantages and disadvantages compared to fiat and electronic money. All this makes it an entirely new asset, a new economic category. Certain features of accounting for foreign currency transactions are also characteristic of cryptocurrency transactions. When using digital currency as a payment method, cryptocurrency is included in monetary items. Accordingly, in accounting for cryptocurrency, subject to control by the NBU, the concepts of "exchange rate" and "exchange rate differences" may be fully applied. To calculate depreciation of fixed assets and software used for mining, we propose to use the cumulative method. This method is applied to objects that wear more in the first years of operation and those that are rapidly morally aging.

Earnings Management Through Foreign Currency Transactions on Companies Listed on Indonesia Stock Exchange

This research aims to examine whether the condition of Rupiah currency, the magnitude of monetary liabilities in foreign currencies, and the condition of operating profit affects the management’s aggressiveness to perform earnings management through foreign exchange gain or loss (FEGL) post. This research was conducted on 258 companies listed on the BEI in 2009 to 2015. This research was successfully proved on earnings management through foreign currency transactions phenomenon for several conditions. First, in the condition of Rupiah appreciation, the managers that have monetary liabilities in foreign currency are less than the monetary assets in foreign currency are more daring to make earnings management through FEGL post than companies that have monetary liabilities in foreign currency greater than monetary assets in foreign currency. Second, managers of companies that decreasing in operating profit, more daring to make earnings management through FEGL post than companies that experience an increase in operating profit. Under the depreciation of the Rupiah, the managers of companies with monetary liabilities in foreign currency are less than monetary assets in foreign currency, are more aggressive to perform earnings than the managers of companies who have monetary liabilities denominated in foreign currency greater than the monetary assets in foreign currency.

Key aspects of Russian accounting of foreign currency transactions

Key aspects of Russian accounting of foreign currency transactions

KLJUČNA PITANJA PREVOĐENJA FINANSIJSKIH IZVEŠTAJA MULTINACIONALNIH KOMPANIJA

Circumstances, which include international trade intensification, development of various forms of business cooperation outside national borders - co-production, transfer of technology, joint ventures, strategic alliances, direct foreign investments, and dynamic changes in the business environment, require the management of a company to change its focus, from a local to a global approach. Multinational companies are business leaders in a global framework. The aim of this paper is to highlight the key challenges that multinational companies face when translating foreign currency transactions and the financial statements of foreign business operations for the purpose of compiling consolidated financial statements. In addition, the paper examines whether the chosen functional currency and the exchange rate can be viewed as instruments of their financial reporting policy?