Conversions of currency to be 'equity'
Readers of those fine-print footnotes on annual corporate reports can search closely for a new entry in 1983. According to regulations set out recently by the private-sector Financial Accounting Standards Board, multinational companies and others with overseas operations will be required to show foreign-currency conversions as shareholders' equity on their balance sheets.Skip to next paragraph
Subscribe Today to the Monitor
Since 1976, under a different ruling, this account entry was recorded as income on profit-and-loss statements. The effect of the adjusted accounting standard, the board indicated, will be to curb wide fluctuations in corporate results due to sharp deviations of foreign currencies in relation to the US dollar.