When I was a junior, one of the toughest area of accounting, for me, is the accounting for foreign currency and translation. It is not really because of a complex subject—at least it is not as complex as cost accounting. It was merely because of I have less interest in foreign currency accounting matter, until I joined a multi-national group of company that involves multi-currency transactions with customers and across the group.
The night before dealing with multi-currency transactions for the first time, I went to a bookstore, grabbed a GAAP book and read it overnight. Hoahh… so tired and still got no clear picture (what should someone expect from a ‘night-GAAP-book-reading’?).
I did not even have a clue what ‘functional currency’ is. It was not because of my professor did not teach me well—she is the most smart (and strict) professor I ever knew. I just didn’t remember what really it is. Well, that is not a cool story at all, I just want to try to be honest so that you won’t do the same. Seriously. Accounting for foreign currency and translation is an important area that every accountant should be able to do it, correctly. But incase if any of you have similar issue right now, Let me hand you a brief summary of what accounting for foreign currency really is and how to account it.
