Module Four: Milestone Onedepartment Of Accounting, Southern

Module Four: Milestone OneDepartment of Accounting, Southern New Hampshire University ACC-690: Advanced Topics/Financial Reporting Professor 02:22:31 GMT -05:00Foreign currency, exchange rates and exchange risksWhile many companies operated in foreign countries, following the guidance of ASC 830 of great importance. Under ASC 830 there are four steps that a company must follow:1. Identify each operation within the foreign company: This company will need to have their own financial statements.2. Determine the currency for each operation: This will be the currency in which theforeign company operates under.3. Measure each operation in the currency that the company operates under: All assets, liabilities, income and expenses must be kept in their financial statements under their own currency.4. Translate to the currency of the business who owns the company: If the company is owned by an American company then the currency will need to be converted to the USD (Carpenter & Lund, 2024)During all of this the appropriate exchange rate must be used. While it is impossible touse the exchange rate for every entry made financials can be prepared monthly, quarterly or annually and a weighted average can be used to determine the exchange rate for the conversion of the financial