Difference of Gain and Loss on Currency Translation and Conversion

  • Thu Trang Faculty of Economics, the National Economics University, Vietnam
  • Nguyen Van Su Faculty of Economics, the National Economics University, Vietnam
Keywords: Translation, Conversion, Currency

Abstract

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.

References

Ahmed, L. (2015). The effect of foreign exchange exposure on the financial performance of commercial banks in Kenya. International journal of scientific and research publications, 5(11), 115-120.

Ahern, K. R., Daminelli, D., & Fracassi, C. (2015). Lost in translation? The effect of cultural values on mergers around the world. Journal of Financial Economics, 117(1), 165-189.

Allee, V. (2008). Value network analysis and value conversion of tangible and intangible assets. Journal of intellectual capital.

Bazaz, M. S., & Senteney, D. L. (2001). Value relevance of unrealized foreign currency translation gains and losses. American Journal of Business, 16(2), 55-62.

Bowen, D. E., & Jones, G. R. (1986). Transaction cost analysis of service organization-customer exchange. Academy of Management Review, 11(2), 428-441.

Holt, P. E. (2011). Some effects of alternative foreign currency translation methodologies on two short-term liquidity ratios. American Journal of Economics and Business Administration, 3(4), 645.

Huefner, R. J., Ketz, J. E., & Largay III, J. A. (1989). Foreign currency translation and the cash flow statement. Accounting Horizons, 3(2), 66.

Louis, H. (2003). The value relevance of the foreign translation adjustment. The Accounting Review, 78(4), 1027-1047.

Mehrling, P. (2013). Essential hybridity: A money view of FX. Journal of Comparative Economics, 41(2), 355-363.

Pinto, J. A. (2005). How comprehensive is comprehensive income? The value relevance of foreign currency translation adjustments. Journal of International Financial Management & Accounting, 16(2), 97-122.

Pinto, J. A. M. (2002). Foreign currency translation method choice: Insights from game theory. Journal of Applied Business Research (JABR), 18(4).

Published
2021-01-30
How to Cite
Trang, T., & Su, N. V. (2021). Difference of Gain and Loss on Currency Translation and Conversion. Journal La Bisecoman, 1(5), 27-32. https://doi.org/10.37899/journallabisecoman.v1i5.269