Income statment - coverting from one currency to another

[777888]

Let's say the balance sheet and income statement figures are calculated in currency A. Now I want to covert these figures to currency B. How can this be done?

For balance sheet figures which are for a POINT in time, I think I can just safely use the end-of-period exchange rate. But how about the income statement figures? Income statement figures are for a PERIOD of time, so should I use the exchange rate at the beginning or end of the period?

Thanks!

 

[bklynboy]

Balance sheet is converted at spot rate (ending YE rate) and income statement is weighted avg for the year. Difference goes to OCI as CTA (cumulative translation adjustment)

 

[kirby]

Hi 777888

For US GAAP, before all this you need to make a determination of the "functional currency" if that foreign currency company is owned by your parent US company.
And that process is not easy. Anyway, that functional currency determination will affect the method of calculating the conversion of foreign currency financial statements. So be aware you need to do more here.