1. CHAPTER 3 ACCOUNTING FOR CURRENCY EXCHANGE RATE CHANGES

2. LEARNING OBJECTIVES: 1. Provide an overview of foreign exchange markets and define related terminology 2. Describe the different types of foreign exchange exposure

3. LEARNING OBJECTIVES: 3. Differentiate between foreign currency transaction and translation 4. Compare the different methods of accounting for foreign currency translation

4. LEARNING OBJECTIVES: 5. Describe the main features of FASB Statement No. 52 and compare it with earlier standards 6. Present the translation methodology of the IASC

5. LEARNING OBJECTIVES: 7. Discuss the financial reporting implications of the introduction of the euro

6. CHAPTER OUTLINE I. Overview of Foreign Currency Markets and Exchange Rates II. Foreign Exchange Exposure

7. CHAPTER OUTLINE III. Accounting for Exchange Rate Fluctuations (1) Foreign Currency Transaction vs. Translation (2) Translation Methods

8. CHAPTER OUTLINE IV. Foreign Currency Translation in the United States V. The International Accounting Standard on Foreign Currency Translation

9. CHAPTER OUTLINE VI. Accounting Issues Related to the Euro (1) Issues Related to the Euro’s Transition Period (2) Issues Related to Financial Reporting and Disclosure