There are no prerequisites.

Course Description

It's quite common for a business to buy from companies located in other countries, or to sell goods and services to them. If so, the organization will likely have to deal with the accounting for foreign currencies. This course describes all accounting activities related to foreign currencies, with complete coverage of the steps needed to convert foreign currency financial statements into the reporting currency of the parent entity, as well as the accounting for basic foreign exchange transactions and hedging activities. In addition, the course addresses related topics, such as the additional steps required to close the books and internal auditing tasks related to foreign currencies.

You'll find answers to many questions about foreign currency accounting in this course, including:

  • What is the process for translating financial statements?
  • Which exchange rates should I use as part of the translation process?
  • What should I do if a subsidiary is located in a country that has a hyperinflationary economy?
  • What is the nature of foreign exchange risk?
  • What hedging instruments are available to mitigate foreign exchange risk?
  • How do I account for a foreign exchange hedge?


Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).

Course Specifics

Mar 7, 2018
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Identify the criteria for determining a functional currency.
  • Identify the issue that shifts a gain or loss out of other comprehensive income.
  • Identify the steps used to deal with the financial statements of an organization operating in a hyperinflationary economy.

Chapter 2

  • Recognize the basic accounting for foreign currency transactions.
  • Recognize what constitutes an effective hedge.
  • Recognize the various types of hedging tools.

Chapter 3

  • Recognize the types of disclosures related to foreign exchange.
  • Recognize the activities related to foreign exchange that internal auditors might engage in.

Table of Contents


Chapter 1 – Financial Statement Translation

Learning Objectives


A Note Regarding Consolidations and the Equity Method

Financial Statement Translation

Determination of Functional Currency

Translation into Functional Currency

Translation of Financial Statements

Reporting in Other Comprehensive Income

Impact on the Statement of Cash Flows

Special Translation Situations

Noncontrolling Interests

Use of Average Exchange Rates

No Applicable Period-End Exchange Rate

Hyperinflationary Effects

Derecognition of a Foreign Entity Investment

Impact of Financial Statement Translation on Closing the Books


Chapter 1 – Review Questions

Chapter 2 – Foreign Currency Transactions

Learning Objectives


Basic Foreign Currency Transactions

Foreign Exchange Risk

The Hedging Concept

Foreign Exchange Hedging Instruments

Loan Denominated in a Foreign Currency

The Forward Contract

The Futures Contract

The Currency Option

The Cylinder Option


Hedge Accounting - General

Hedge Accounting – Cash Flow Hedges

Hedge Accounting – Net Investment Hedges

Unhedged Foreign Exchange Gains and Losses

Inclusion in Impairment Analysis


Chapter 2 – Review Questions

Chapter 3 – Other Foreign Currency Topics

Learning Objectives


Internal Audit Tasks

Foreign Currency Disclosures


Chapter 3 – Review Questions

Review Question Answers and Rationales

Chapter 1

Chapter 2

Chapter 3



Qualified Assessment

Answer Sheet

Course Evaluation


Choose Your Preferred Format

Online Access

Get immediate access to a robust collection of learning and reference materials, allowing you to dive deep into the information you need. Our self-study materials are authored by top-quality, industry experts who focus on helping you grasp concepts quickly using real-life examples. Download your CPE to any device, and take it with you so you can learn when and wherever you want. Complete your CPE with an online exam, and enjoy instant grading with the option to print your certificate immediately upon passing.

online access
Hard Copy

Our self-study materials are authored by top-quality, industry experts. You’ll receive a bound notebook of all the course materials, shipped to you within one business day. In addition, you’ll also have full online access. Each self-study package includes a robust collection of learning and reference materials to help you cover the information efficiently and put it into practice immediately.

hard copy
Self-Study Video

Experience high-quality instruction with our Self-Study Videos, available to you 24/7. With more than 80+ videos currently in the Western CPE Self-Study Video library, you can see and hear our expert instructors deliver the information you need in a dynamic way that allows you to immediately apply your learning. Unlike a live course or webcast, you can complete the course on your own time, playing and pausing as needed. Self-Study Videos allow you to complete your CPE requirements on your own time.

hard copy

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