TRANSLATION AND THE DIFFERENCE AMONG CURRENCY CONVERSION
Strange currency formulation this Process at representation refinancial information of one currency goes to other currency. While strange currency conversion among interchange one currency goes to other currency physically. Its difference, translation only changing satuan monetary, e.g., on stated balance deep british pound is presented returns to point one par of ACE dollar. No happening physical interchange, and no transactions which pertinent happening. While conversion, one that enable happening physical interchange and available transactions relates to happen.
STIPUBTING IN STRANGE RATE
1. Conversion, interchange one currency goes to other currency.
2. Present rate, prevailing rate on the fifteenth financial statement which relevant.
3. Positioning clear asset beresiko, excess asset to be measured or deep strange currency and deep translation with present task rate is measured or deep strange currency and enlightened with present rate.
4. Currency gets contract meter, deal for currency interchange of a variety state by use of particular rate (forward is rate) on the fifteenth particular at future.
5. Functional currency is main currency that utilized by a firm deeping to carry on business activity. Usually that currency is State currency where that firm lies.
6. Trade historical rate, strange currency exchange rate that is utilized while asset or liabilities in currency stranging to buy or going.
7. Reporting currency, currency that is utilized in corporates finance write-up collation.
8. Spot is exchange rate, currency exchange rate in the period of soon.
9. Adjusted translation, evoked fitting of functional currency financial statement formulation corporate to reporting currency.
Strange currency formulation glossary, adapted from GAAP, (PSAK) No.52 is year 1981.
1. Attribute, item’s quantitative characteristic that is measured for the purpose accounting. Cost example, history and substitution cost that constitute attribute of asset.
2. Conversion, pertukatan is currency goes to other currency.
3. This interchange assesses, prevailing exchange rate on the fifteenth financial statement which relevant.
4. Discount, while inferior next exchange rate of currently level.
5. Positioning clear asset beresiko, as one is measured more than asset or deep strange currency and enlightened by use of present task rate is measured or deep strange currency and enlightened with present rate.
6. Strange currency, currency besides currency which utilized by a State, currency besides reporting currency that utilized by firm.
7. Financial statement in strange currency, financial statement utilizes intern currency as unit of measurement.
8. Foreign exchange transactions, transactions (which is sell or goods or service buy, or book debt or credit loan) accord stated condition deep currency besides corporate functional currency.
9. Strange currency formulation, process to declare for eye amount or is measured deep one currency goes to other currency with rate among two currencies.
10. Intern hads out, operate for that result financial statement that (1 ) are merged or dikonsolidasikan or one noted by ekuitas’s methods in corporate finance reporting and (2 ) ruled deep strange currencies besides corporate reporting currencies rapporteurs.
11. Keep up contact interchange, deal for commutes currency of state that variably by use of particular rate (forward is rate) on the fifteenth particular at future.
12. Currency functional, currency that utilized by firm outgrows business on tours, and in results or utilize cash.
13. Trade historical rate, strange rate of exchange that is utilized while asset or liabilities in currency stranging to buy or going.
14. Local currency, currency of State that is utilized; reporting currency that utilized by domestic and also intern operation.
15. Monetary policy product, liabilities to pay or rights to accept one currency unit in appreciative constant at future.
16. Reporting currency, currency that is utilized in statements.17’s corporate finance collation. Date working out, date of while that book debt paid by credit is not is charged.
18. Spot is exchange rate, currency exchange rate in the period of soon.
19. Date of transactions, date of noted transactions in accounting record of rapporteur firm.
20. Adjusted translation, evoked fitting of functional currency financial statement formulation corporate to reporting currency.
21. Measurement unit, currency that is utilized to measure asset, liabilities, income and charges.
THE DIFFERENCE GAIN AND INTERN RATE
If local currency viewpoint that will be utilized (viewpoints corporate local), its input is adjusted current unrealized formulation not necessarily been done. Insert gain translation and disadvantages in income will wreck real finance relationship and gets to mislead users that information. Gain translation or disadvantages has to be treated from local currency viewpoint as adjusted as ekuitas’s owner settle. If parent company reporting currency is financial statement measurement unit be enlightened (parent company dot sees), suggested to recognize gain or disadvantages on gain translation as soon as possible. Parent company viewpoint see subsidiary company beyond seas as extension of its parent company. Gain translation and disadvantages reflect ekuitas’s ascension or decrease of intern investment in domestic currency and has to be admitted.
1 ) Suspensi
Changing point one par with assets domestic currency clear strange subsidiary company don’t realise and not influential on Current local currency cash one is resulted from entitas intern. Rate difference that shall accumulate separately as part of ekuitas consolidation.
2 ) Suspensi and Amortisation
Suspensi is translation gain or disadvantages and does amortisation upon item that beneficent one is engaged balance fitting, particularly relates by debt be put off will amortised up to fixed asset which charged by balance reporting in the same way as depreciation or is put off and is amortised for retained loan as adjusted as to flower charges.
3 ) a portion Suspensi
Gain translation and disadvantages is subject to be admit loss as soon as possible happening afters, but admitting after gain realises, this just because constitutes a gain, ignore changing exchange rate.
4 ) Be Not been delayed
Recognizing translation gain and disadvantages in balance reporting soonest. But, inserting translation gain and disadvantages year profit walks will introduce random element in gain who can beget fluctuation that signifikan in propertied deep case changing translation gain point increases and loss reflect ascension or investment decrease in domestic currency and has to be admitted.
RATES ARITHMETIC BALANCE STRANGE
Gain / disadvantages transactions: the difference among rate on transactions and exchange rate date of record on the fifteenth amount payment x is paid deep strange currency.
• Importer Indonesianing to buy goods of USA firm for the price $ 1.000.000 while rate 1 USD = Rp 9.500.
• Corp’s Indonesia pay book debt in the period of 30 days while rates $ 1 = Rp 9600, therefore available transactions loses Rp 100.000 (1. 000. 000 x (Rp9. 600 Rp9.500))
To record disadvantages transactions, can utilize two approachings: one transactions and two transactionses
INFLUENCE METHODICS INTERN RATE ON FINANCIAL STATEMENT
Present exchange rate (now) are exchange rate on the fifteenth financial statement. Historical rate is rate at the moment a currency deep asset strange first time be gotten, or while does bit intern currency at first place. Zoom average (averagely) an average simple of present rate and historical.
Exchange rate influence to financial statement purpose
1. Exchange rate purpose to protect gains historical financial statement and disadvantages strange currency formulation.
2. Present exchange rate purpose cause gain or disadvantages on translation.
• Transactions in strange currency to be become while one firm buys or sell goods with paying one is given in strange currency or while firm borrows or loaning deep strange currency.
• One strange currency transactions gets deep eye one currency, but is measured or is noted deep another currency.
EVALUATION AND STRANGE RATE METHOD ELECT TERMINOLOGICAL THE BEST ONE AND MONEY MARKET CONDITION
Methodic translation can be clasified as two type methodic that utilize singles exchange rate for attending back strange currency balance formulation with appreciative one par in domestic currency or one method which utilize various rate.
1. Methodic Single Rate.
This method have so long popular at Europe, applying exchange rate, current exchange rate and foreclosure rate, to all lancer’s asset and liabilities. Income and charges in strange currency by and large enlightened by use of rate which applies at the moment avowed writing. But, to memfasilitasi this goods usually been enlightened by use of rate average most weighs period appropriate interchange walk. Financial statement hads out intern have domicile alone reporting, environmentally local currency whereabouts strange affiliation firm does business. Asset or liabilities in strange currency to be said face exchange rate risk if one par in currency that is utilized to translate asset or liabilities.
2. Severally methodics exchange rate
This method merge rate currency exchange rate Many historical and present deep translation processes.
3.Now Nonkini Methodics
Base Method Now, lancer’s current asset and liabilities intern subsidiary company is enlightened into parent company reporting currency it bases interchange now. Asset and liabilities was enlightened by price lancer trades historical. Item of balance reporting (but to depreciation and amortisation) enlightened bases rate average what do apply at each month operation, or bases averagely be weighed up to reporting period entire. Depreciation and amortisation is enlightened bases historical rate upon acquired asset. But, this method not regard economy element. Utilizing exchange rate year-end to translate lancer’s asset implies that cash, credit, and stockpiling in same strange currency beresiko exchange rate.
4. Monetary nonmoneter methodics
Non monetary Monetary method also utilize numeric scheme balance unutk determines translasi’s rate suitably. Asset and monetary liabilities to be enlightened bases rate now. Product non monetary, longterm investment, and stock investor is enlightened by use of historical rate. Item of balance reporting is enlightened by use of procedure which equals that is worded for concept non now now.
5. Temporal methodics
By use of method temporal, translation converts currency be process re measurement or given point representation. This method not revamp item’s attribute that is measured, but just change measurement unit. This translation currencies deep balance strange cause item’s repetitive measurement such a but not estimation that actually. Base US GAAP, measured by total cash on the fifteenth balance. Bill and liabilities is noted bases expected point will be accepted or is paid at the moment maturity value.