Foreign currency transaction gains and losses
- Foreign currency transaction gains and losses
Gains or losses resulting from the effect of exchange rate changes on transactions denominated in currencies other than the functional currency (for example, a U.S. enterprise may borrow Swiss francs or a French subsidiary may have a receivable denominated in kroner from a Danish customer). Gains and losses on those foreign currency transactions are generally included in determining net income for the period in which exchange rates change unless the transaction hedges a foreign currency commitment or a net investment in a foreign entity. Intercompany transactions of a long-term investment nature are considered part of a parent's net investment and hence do not give rise to gains or losses.
U.S. Dept. of Energy, Energy Information Administration's Energy Glossary
Energy terms .
2014.
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