What are the conceptual problems that must be solved infinancial statements to convert them into foreign currency? Acountry's inflation affects the financial statements?

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Jamar FerryLv2

14 Aug 2018

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Derivatives Statement No. 133 Accounting for Derivative Instruments and Hedging Activities establishes accounting and reporting standards for derivative instrument embedded in other contracts and for hedging activities. The statement requires that an entity recognize all derivatives as either assets or liabilities in the statements of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as: (a) A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment. (b) A hedge of the exposure to variable cash flows of a forecasted transactions or (c) A hedge of the foreign currency exposure a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security or a foreign currency denominated forecasted transactions. Requirements Review Statement No. 133 and evaluate the standard in terms of the conceptual framework. Define a derivative from an accounting perspective. Provide at least three characteristics of a derivative. Name and describe three derivatives. When was the implementation date of the statement? Briefly summarize the statement.