Foreign Currency Cash Flows

Cash flows arising from transactions in a foreign currency should he recorded in an enterprise’s reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the dare of the cash flow. A rate that approximates the actual rate may be used if the result is substantially the same as would arise if the rates at the dates of the cash flows were used.

 The cash-equivalent held in a foreign currency are to be reported as a separate part of the equivalent during the period.

Evidently, unrealized gains and losses arising from change in foreign exchange rates are not cash flows.

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