Foreign Currency Transaction
/ˈfɔrən ˈkʌrənsi trænˈzækʃən/
Definitions
- (n.) A financial transaction involving the exchange or use of one currency for another, often subject to specific tax, accounting, and regulatory rules.
The company recorded the foreign currency transaction in its financial statements according to GAAP.
- (n.) A transaction denominated in a currency different from the reporting entity's functional currency, requiring recognition of exchange rate gains or losses.
Foreign currency transactions must be translated at the exchange rate prevailing on the transaction date.
Forms
- foreign currency transaction
- foreign currency transactions
Related terms
See also
Commentary
In legal and accounting contexts, clarity about the functional currency and applicable reporting standards is essential when addressing foreign currency transactions.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.