‫َ‬ ‫ن‬

‫يمي وأنت‪ِ /‬‬

‫أنت خارج من المجمع‪ ،‬شارع ال ـ ‪( KM‬إسالم‪)01095350069 -‬‬ ‫مكتبة التفوق‪ ،‬أول شارع‬

‫‪International‬‬
‫‪Accounting‬‬
‫)‪Session (1‬‬
‫‪Accounting for foreign currency‬‬

‫حممود حممد بدوي‬

 Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

Accounting for foreign currency transactions

‫يهتم فرع المحاسبة بممارسات المحاسبة الدولية الت تنشأ نتيجة ممارسة األنشطة الدولية من قبل مختلف ر‬: ‫المحاسبة الدولية‬
.‫الشكات متعددة الجنسيات‬ ‫ي‬
Definition of International Accounting:

• Branch of accounting cares about international accounting practices that arise as a result
of the practice of international activities by various multinational companies.

The need to International Accounting:

:‫الحاجة إىل المحاسبة الدولية‬
1. Modern international economy properties.
‫الدوىل الحديث‬ ‫خصائص االقتصاد‬ .1
2. The growth of multinational companies. ‫ي‬
‫نمو ر‬
‫الشكات متعددة الجنسيات‬ .2
3. Differing systems and methods of accounting practice. ‫اختالف نظم وأساليب ممارسة المحاسبة‬ .3
4. Increased interest in foreign direct investment. ‫ر‬
‫المباش‬ ‫األجنت‬
‫ي‬ ‫زيادة االهتمام باالستثمار‬ .4
5. International monetary system. ‫الدوىل‬
‫ي‬ ‫النظام النقدي‬ .5

:‫أهمية المحاسبة الدولية‬

.‫الت تم استخدامها إلعداد البيانات المالية المنشورة‬

‫المعايي المحاسبية ي‬ .1
.‫نضورة معرفة كيفية إجراء التعديالت الالزمة عىل البيانات المالية المنشورة لتصبح صالحة للمقارنة من قبل متخذي القرار‬ .2
.‫الت سيتم اإلفصاح عنها ن يف تلك البيانات‬
‫تحديد المعلومات ي‬ .3
.‫الت يجب االعتماد عليها لمراجعة تلك البيانات‬ ‫ي‬ ‫اجعة‬ ‫ر‬ ‫الم‬ ‫التعرف عىل معايي‬ .4
.‫الت تتم بالعمالت األجنبية‬ ‫ن‬
‫ضورة حساب المعامالت ي‬ .5
.‫الضيبية الناتجة عن األنشطة الدولية‬ ‫تحديد اآلثار ن‬ .6

The importance of international accounting:

1. Accounting standards that have been used to prepare the published financial statements.
2. The need to know how to make the necessary adjustments to published financial
statements to become valid for comparison by the decision-makers.
3. Identify the information to be disclosed in those statements.
4. Recognize the auditing standards to be relied upon to review those statements.
5. The need to account for transactions that be done by foreign currencies.
6. Determine the tax effects resulted from international activities.

‫أهداف المحاسبة الدولية‬

.‫تنظيم المحاسبة وممارسات إعداد التقارير‬ .1
.‫الشكات العالمية‬‫فحص دور المحاسبة نف ر‬ .2
Objectives of International Accounting ‫ي‬
‫عمل مقارنات ن‬
.‫بي أنظمة المحاسبة المختلفة‬ .3
.‫فهم البيانات المالية الدولية‬ .4
1. Regulation of accounting and reporting practices.
2. Examine the role of accounting in international companies.
3. Make comparisons between different accounting systems.
4. Understanding of international financial statements.

2
Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

‫خصائص المحاسبة الدولية‬

‫مشكلة سعر ضف العمالت (الفروق نف أسعار العمالت ن‬
.)‫بي الدول‬ .1
‫ي‬
)‫الماىل المستقل؟‬
‫ي‬ ‫بالبيان‬ ‫المقصود‬ ‫هو‬ ‫ (ما‬.‫إعداد البيانات المالية الموحدة‬ .2
‫اختالف معدالت التضخم ن‬
‫بي الدول؟‬ .3
‫اآلثار ن‬
.‫الضيبية للمعامالت الدولية‬ .4

Characteristics of International Accounting

1. Currencies exchange rate problem (differences in the prices of currencies between the
countries).
2. Preparation of consolidated financial statements. (What is the mean standalone financial
statement?)
3. Different between inflation rates between countries?
4. Tax effects of international transactions.

:‫مشاكل التسجيل واإلبالغ عن المعامالت بالعمالت األجنبية‬

.‫يجب ترجمة المعامالت بالعملة األجنبية (بالدوالر) قبل أن يتم تجميعها مع المعامالت المحلية‬ •
.‫الذمم المدينة أو الدائنة بالعمالت األجنبية عرضة للمكاسب والخسائر‬ •
.‫الشكات اسياتيجيات التحوط مع المشتقات لتقليل تأثي تغيات أسعار الضف‬ ‫تستخدم ر‬ •

Recording and reporting problems with foreign currency transactions:

• Transactions in a foreign currency must be translated (expressed in dollars) before they

can be aggregated with domestic transactions.
• Receivables or payables denominated in foreign currencies are subject to gains and
losses.
• Companies use hedging strategies with derivatives to minimize the impact of exchange
rate changes.

.‫ عملية التعبي عن المبالغ المبينة بعملة أجنبية بعملة الكيان القائم بإعداد التقارير باستخدام سعر الضف المناسب‬:‫اليجمة‬

❖ Translation: process of expressing amounts stated in a foreign currency in the currency of

the reporting entity by using an appropriate exchange rate.
‫ن‬
.‫معي‬ ‫ن‬ ‫ النسبة ن‬:‫سعر الضف‬
‫بي وحدة عملة وعملة أخرى يمكن من خاللها استبدال هذه الوحدة يف وقت‬

❖ Exchange rate: ratio between a unit of one currency and another currency for which that
unit can be exchanged at a particular time.

.‫الت يمكن تحويلها إىل وحدة واحدة من العملة المحلية‬ ‫ر‬

‫ وحدات العملة األجنبية ي‬:‫سعر الضف غي المباش‬

❖ Direct Exchange Rate: Units of domestic currency that can be converted into one unit of
foreign currency.

3
Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬
.‫الت يمكن تحويلها إىل وحدة واحدة من العملة المحلية‬ ‫ر‬
‫ وحدات العملة األجنبية ي‬:‫سعر الضف غي المباش‬
❖ Indirect Exchange Rate: Units of foreign currency that can be converted into one unit of
domestic currency.
.‫ السعر الذي يمكن من خالله تبادل العمالت اليوم‬:‫السعر الفوري‬

❖ Spot Rate: Rate at which currencies can be exchanged today.

.‫ السعر الذي يمكن من خالله تبادل العمالت ن يف تاري ــخ ما ن يف المستقبل‬:‫السعر اآلجل أو اآلجل‬

❖ Forward or Future Rate: Rate at which currencies can be exchanged at some future date.
.)‫ بسعر محدد (السعر اآلجل‬،‫مستقبىل محدد‬ ‫ن‬
‫ي‬ ‫ عقد لتبادل عمالت دول مختلفة يف تاريـ ــخ‬:‫عقد الضف اآلجل‬
❖ Forward Exchange Contract: Contract to exchange currencies of different countries on a
stipulated future date, at a specified rate (the forward rate).

:‫األسعار العائمة‬
‫• يتم تحديد العالقة ن‬
.‫بي العمالت الرئيسية من خالل عوامل العرض والطلب‬
.‫الت تتعامل مع رشكة أجنبية‬ ‫ر‬
‫• زيادة المخاطر عىل الشكات ي‬
❖ Floating Rates:
✓ Relationship between major currencies is determined by supply and demand factors.
✓ Increase risk to companies doing business with a foreign company.

Exchange Rate

Difference between Direct Exchange Rate VS Indirect Exchange Rate

Translation numbers of these foreign currency into Egyptian currency both direct and indirect
exchange rate.

Direct Exchange Rate Indirect Exchange Rate

$1,000 $1= L.E 5 L.E 1= $0.2
SR 2,000 SR 1= L.E 1.25 L.E 1= SR 0.8

Solution

Direct Exchange Rate Indirect Exchange Rate

$1,000 1000*5= L.E 5,000 1,000/0.2= L.E 5,000
SR 2,000 2,000*1.25= L.E 2,500 2,000/0.8= L.E 2,500

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 Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

Example (1)- Purchase Transaction

LA Egyptian company purchases on May 1 merchandise from USA Company for $100.000 terms
Net 90 days, At payment on July 30. The Egyptian company prepares its financial statements on
June 30 each year

Required: Prepare journal entries under using "two transactions & one transaction" If you learn
that the selling spot rate at this time was as follow:

May 1 $1= L.E 6.99 (Purchase)

June 30 $1= L.E 7.04 (Financial Statements)
July 30 $1= L.E 7 (Payment)
Purchase Transaction

.)Purchase( ‫) وأحط‬Inventory( ‫) هشيل ال ـ‬Periodic( ‫لو طلب حل المسألة‬ •

)Periodic( ‫ تحلها‬،‫لو محددش طريقة الحل‬ •
06-30 ‫) هشيل تاريـ ــخ‬One Transaction( ‫لو طلب حلها‬ •

‫ يكون ن‬Financial Statement ‫الزم يكون ال ـ‬

.‫بي البيع واإلستالم عشان يتم تسجيله‬

Date Transaction Dr. Cr. Date Transaction Dr. Cr.

Inventory 699,000 A/P 699,000
1-5 A/P 699,000 30-7 COGS (Loss) 1,000
Cash 700,000

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Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

Example (2)- Sales Transaction

Assume that on May 17,2005, Worldwide Corporation, which uses the perpetual inventory
system and prepare financial statement monthly, sold merchandise acquire from a US supplier
for $12000 to French customers for € 15000 with payment due June 16,2005

• On May 17,2005, the buying spot rate for the euro was (€ 1=$ 1.01)
• On May 31,2005, the buying spot rate for the euro was (€ 1=$ 0.99)
• On June 16,2005, the buying spot rate for the euro was (€ 1=$ 0.995)

Answer

‫ هشيل قيد المخزن‬Periodic ‫• لو طلب حل المسألة‬

6
Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

Exercise (12-1) Importing and Exporting Journal Entries

Selco, a U.S. Company, imports and exports tools, shop equipment, and industrial construction
supplies. The company uses a periodic inventory system. During April the company entered into
the following transactions. All rate quotations are direct exchange rates.

• April 3 Purchased power tools from a wholesaler in Japan, on account, at an invoice cost
of 1,600,000 yen. On this date the exchange rate for the yen was $0.0072.
• April 5 Sold hand tools on credit that were manufactured in the U.S. to a retail outlet
located in West Germany. The invoice price was $2,800. The exchange rate for marks
was $0.5829.
• April 9 Sold electric drills on account to a retailer in New Zealand. The invoice price was
16,800 U.S. dollars and the exchange rate for the New Zealand dollar was $0.576.
• April 11 Purchased drill bits on account from a manufacturer located in Belgium. The
billing was for 801,282 francs. The exchange rate for francs was $0.0312.
• April 16 Paid 1,000,000 yen on account to the wholesaler for purchases made on April 3.
The exchange rates on this date was $0.0067.
• April 18 Settled ‫ختلصنا من‬the accounts payable with the Belgium manufacturer. The
exchange rate was $0.0368.
• April 22 Received full payment from the New Zealand retailer. The exchange rate was
$0.568.
• April 30 Completed payment on the April 3 purchase. The exchange rate was $0.0078.
(1,600,000- 1,000,000= 600,000 yen)

Required:

Prepare journal entries on the books of Selco to record the transactions listed above.

7
Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

Importing and Exporting Journal Entries

8
 Mahmoud Mohamed Badwi ‫ واذكر الل‬،‫صلي علي النيب من قلبك‬

Exercise (12-2) Importing and Exporting Journal Entries

During December of the current year, Teletex Systems, Inc., a company based in Seattle,
Washington, entered into the following transactions:

• Dec 10 Sold seven office computers to a company located in Colombia for 8,541,000
pesos. On this date, the spot rate was 365 pesos per U.S. dollar. ($1= 365 pesos)
• Dec 12 Purchased computer chips from a company domiciled in Taiwan. The contract was
denominated in 500,000 Taiwan dollars. The direct exchange spot rate on this date was
$0.0391.
A. Prepare journal entries to record the transactions above on the books of Teletex
Required
Systems, Inc. The company uses a periodic inventory system.
:
B. Prepare journal entries necessary to adjust the accounts as of December 31. Assume
that on December 31 the direct exchange rates were as follows:
• Colombia peso $0.00268
• Taiwan dollar $0.0351
C. Prepare journal entries to record settlement of both open accounts on January 10.
Assume that the direct exchange rates on the settlement dates were as follows:
• Colombia peso $0.00320
• Taiwan dollar $0.0398