Date of Award

1983

Document Type

Thesis

Degree Name

Master of Science

Department

Business

First Advisor

Ron Unell

Second Advisor

Charles Orme-Rogers

Third Advisor

Patrick Land

Abstract

A culminating project in accounting is somewhat different than one that might be undertaken in other disciplines. While accounting is generally considered to be about numbers and therefore straightforward in application , there exist prescribed principles, procedures , and statements that must be adhered to by accountants . Viewing the discipline from this perspective the door is opened to vast areas of discussion and interpretation of accounting methods.

This paper compares three methods of treating foreign currency translation gains and losses , and the effect on reported earnings . It was written to accomplish three objectives.

  1. To present sufficient background to establish a need for discussion of the problem of foreign currency translation gains/losses and the effect on earnings.

  2. To demonstrate that the application of three different methods of foreign currency translation to the same data results in three different results.

  3. To compare how the determined results affect earnings.

The conclusions found in this paper should aid the reader in understanding some of the basic problems facing multinational companies. The reader should also gain insight into understanding the effect of currency exchange rates on the balance sheet of multinational companies .

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Accounting Commons

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