Posted by forex at 8:50 AM
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1. Convert the foreign currency payment into dollars at the currency conversion spot rate on the date of the payment transaction. You can find the rate listed on any major international business news website such as Yahoo! Finance, or MSN Money.
2. Record the payment using the converted amount.
3. Prepare subsequent balance sheets with the foreign currency reported using the conversion rate at the closing date of the balance sheet.
4. Report any differences between the initial conversion amount and the subsequent amount as either profit or loss on the subsequent balance sheets.