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What is IMF and why should an Accounting Professional become

literate about foreign exchange?

The relation of money or currency is a broad and profound

topic especially to Accountants. It needs wide comprehension and
analysis. According to the power point presentation that was
given that International Monetary Fund or the IMF is an
“International organization established to promote international
monetary cooperation, exchange stability, and orderly exchange
arrangement.” It’s primary purpose is to make sure the stability
of the international monetary system (the system of exchange
rates and international payments that enables countries (and
their citizens) to transact with each other. According to an
article that I have read from International Monetary Fund that
“the organization wants to promote a global economic growth and
financial stability, encourage international trade, and reduce
poverty.” As far as I remember from our discussion with Financial
Accounting and Reporting that the International Monetary Fund
makes loans to countries that are experiencing financial crisis
in order to prevent or diminish the economic downturn which
serves as a big help for a country. They also provide financing
and advices to their members in times of economic distress as
well as working with developing nations to help them attain or
accomplish macroeconomic stability.

Being an Accountancy student is very challenging because I

need to read and comprehend a lot of books, topics and concepts,
and I also don’t want to prefer with only one source of each
topic. Just like in Managerial Economics where the foreign
exchange were discussed and if I remember it correctly that it is
a trading of one currency for another like for example a United
States based company is doing a business with a company in Korea
and paying them in U.S currency. The foreign exchange topics is
really important to a Professional Accountant especially to a
public or Government Accountants because first the exchange rates
of every country are dynamic and has always great possibilities
that it will be different from time to time in which the payment
is made to when it is actually converted to the local currency. A
transaction where Accountants must analyze, record and as well as
realized it’s gain and loss because it might be a great effect of

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a company and it differs on whether the transaction has been

completed by the end of the accounting period. Next is the
accountant must be updated in every changes in the International
Accounting Standards just like the IAS 21 which is the Effects of
Changes in Foreign Exchange Rate where a entity is required to
determine a functional currency based on primary economic
environment and generally records foreign currency transactions
using the current rate on the date of transaction. Lastly, the
Accountant must be literate with all the Accounting Standards for
a certain country where she or he wants to work just like me. I’m
already having some research regarding to a country which is
Singapore about their Accounting or how they dealt with foreign
currencies. According to an article which is the Global Finance
that “Singapore is one of the richest countries in the world as
of 2019. They have Current International Dollars:  103,717.
Singapore's economy expanded by 3.2% in 2018, a sharp slowdown
compared to 2017, when it grew 3.9%. Global trade tensions can
have such effects. Yet one would be hard-pressed to find any clue
of this deceleration by looking at the country’s GDP per capita
figures. According to the IMF, GDP per capita grew in 2017 grew
to over $86,000 from the previous year, reached $89,000 in 2018,
and is projected to follow this upward trend in 2019 and until at
least 2024, when it is expected to jump to $99,000”. Also what I
have seen in news that Singapore is into trade and manufacturing
which shows them being a hard working country, and really had a
smart policy and known for being a business friendly place in the
world. All in all, these are my reasons why should an
Professional Accountant be knowledgeable with regards to foreign
exchange.

Reference:

Detter, D. (2019). For Economic Growth, the World Needs

Accountants. Retrieved from: https://www.ifac.org/knowledge-
gateway/contributing-global-economy/discussion/economic-growth-
world-needs-accountants

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Deloitte. IAS 21 — The Effects of Changes in Foreign Exchange

Rates. Retrieved from:
https://www.iasplus.com/en/standards/ias/ias21

International Monetary Fund. The IMF at a Glance. Retrieved from:

https://www.imf.org/en/About

Ventura, L. (2019). Richest Countries in the World 2019.

Retrieved from: https://www.gfmag.com/global-data/economic-
data/richest-countries-in-the-world

Sullivan, D. (2019). Foreign Exchange Accounting Rules. Retrieved

from: https://smallbusiness.chron.com/foreign-exchange-
accounting-rules-77779.html

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