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Foreign Currency Translation: A Case Study Based on New Accounting Standards in Australia
Eva K Jermakowicz,
Tennessee State University
Svetlana Vlady, Griffith University
ABSTRACT. In January 2005 the Australian Accounting Standards Board issued accounting standard AASB 121 The Effects of Changes in Foreign Exchange Rates, which was based on the International Accounting Standard (IAS) 21 with the same title. In the case study, students are given the role of a U.S. financial analyst examining the impact of the adoption of AASB 21 on two Australian multinational companies. They also have an opportunity to compare accounting methods for translating foreign currency statements in Australia with methods required by International Financial Reporting Standards (IFRS) and U.S. GAAP. Excerpts from authoritative literature and company financial statements are provided to help students with their analyses.
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