Response by United States Financial Managers to Financial Accounting Standard No. 8

Stanley, Marjorie T.; Block, Stanley B.

doi:10.1057/palgrave.jibs.8490665

Cited by 9 publications

(4 citation statements)

References 3 publications

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“…The inferences resulting from this survey responses include: CFOs place little emphasis on translation exposure in the FAS#52 environment; CFOs face difficulty in balancing their long-term perceptions of a short-term oriented financial market; and, as Stanley and Block (1978) found, CFOs appear unsure of the differing consequences of transactions and economic exposure and how to properly hedge against economic exposure. The implications of this is that MNCs who are able to overcome those difficulties and properly hedge against these exposures will be at a competitive advantage over those who are unable to do so,…”

Section: Resultsmentioning

confidence: 98%

Implications of Fasb #52

Johnson¹,

Kallianatis²,

Kasibhatla³

et al. 1995

International Journal of Commerce and Management

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Section: Resultsmentioning

confidence: 98%

Implications of Fasb #52

Johnson¹,

Kallianatis²,

Kasibhatla³

et al. 1995

International Journal of Commerce and Management

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“…At the very outset, the identification of the functional currency under FAS 52 is substantially subjective with an ample scope for manipulation or even, unintentional judgment error in the application of the prescribed tests. The survey results have in fact vindicated the existence of such instances (Griffin & Castanias, 1987;Heines, 1986;Stanley & Stanley, 1978).…”

Section: Resultsmentioning

confidence: 99%

10.5937/ekonhor1402101s = On the efficacy of translation methods and the functional currency approach in reporting price level changes

Singh¹

2014

Ekon horizonti

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This article provides an evaluation of translation accounting through a logical and deductive analysis of the concepts. The relationship between the inflation of constituent countries and the methods of translation is explored. It is established that only the Current Value (Purchasing Power Parity) (PPP) Method correctly reports the effects of the inflation of both countries. The Current Rate Method fails to correctly report the effect of the subsidiary country's inflation and the temporal method does not correctly report the parent country's inflation. The efficacy of FAS 52 (USA) and the functional currency concept is examined. Under FAS 52, the functional currency determines the method to be adopted for translation and hence the accounts of the subsidiary that are subject to an exchange rate risk. It is, however, argued that the exchange rate risk is related to violations of Purchasing Power Parity. The degree of such violations should, therefore, form the premise on which the functional currency and translation method should be selected.

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“…A number of studies reflect managements' displeasure with currency translation rules. Examples are Stanley and Block (1978) and Cooper (1978). Griffin (1983); Ayers (1986);Berg (1987) and Kelly (1985) and others indicate that large companies with low management ownership are more likely to lobby for or against a proposed change in currency translation rules than smaller companies with higher management ownership.…”

Section: Surveys Of Management Perceptions and Changes In Management mentioning

confidence: 99%

Critical Elements of Foreign Currency Translation: A Worldwide Informational and Accounting Problem

Holt¹

2013

American Journal of Economics and Business Administration

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The purpose of this study is to describe and clarify the foreign currency translation problem and to suggest normative criteria by which various methodologies can be tested. The translation problem is presented as a set of four critical questions: (1) whether translation should be done, (2) what numbers to use to translate foreign currency accounts into the reporting currency, (3) what to do with the imbalance that results from translating different accounts with different numbers and (4) what, if anything, to do about changes in price levels. Several normative criteria are recommended for evaluating of various translation methodologies, some related specifically to earnings quality. It is further suggested that when empirical research is done to test various translation methodologies against normative criteria, (1) no translation at all and (2) price parity methodologies should also be tested.

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Response by United States Financial Managers to Financial Accounting Standard No. 8

Cited by 9 publications

References 3 publications

Implications of Fasb #52

Implications of Fasb #52

10.5937/ekonhor1402101s = On the efficacy of translation methods and the functional currency approach in reporting price level changes

Critical Elements of Foreign Currency Translation: A Worldwide Informational and Accounting Problem

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