The Impacts of Functional Currency of International Financial Reporting Standards on Financial Statements

• Main Authors: Wan-o Wang, 王婉娥
• Other Authors: Hsu Yun-Sheng
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/64571331371517156538

碩士 === 國立中興大學 === 高階經理人碩士在職專班 === 98 === Due to the international trade models among the enterprises being made a great progress in the last years, the international capital was developed. In the process, a set of common International Accounting Standards was promoted to settle the demands of the investors who had hard time to read and confused with the various Accounting Standards Financial Statements prepared by different countries. Then, the International Accounting Standards Committee was established in 1973 and actively developed a series of the International Accounting Standards（IAS）which are high-quality、easy-to-understand and global-identified. The purpose is to approach the requirements of investors、creditors and other financial-report users。 In view of this, the FSC announced in May 2009 that Taiwan will be forward adopted IAS to translate financial statements in 2013. That will be a milestone era uniform. This article is focused on discussing the differences between GAAP No 14 "Accounting for Foreign Currency Translation" and IAS No 21 "Effects of Changes in Foreign Exchange Rates". Discussion is also concerned by using IAS to prepare financial statements which may meet both identified problems of the functional currency and conversion problem for financial statements. Using different currency would produce different impacts on the financial statements. Adopting functional currency into accounting gains or losses on financial statements, the impact may be unexpectedly large, especially when the exchange rate is much fluctuated. In a case study of a certain company, U.S. dollar is treated as its preliminarily functional currency. The impacts are analyzed from a few points of view, through preparing re-measurement、translation and expression of external financial statements.