Multinational Accounting:

Foreign Currency Transactions

and Financial Instruments
 FOREIGN CURRENCY EXCHANGE RATES
• Tingkat nilai tukar mata uang asing dipengaruhi oleh faktor ekonomi yang
berhubungan dengan suply dan demand terhadap mata uang asing
 FOREIGN CURRENCY TRANSACTIONS
• Transaksi yang brhubungan dengan nilai tukar mata uang asing adalah :
1. pembelian ataupun penjualan barang dan jasa (imports or exports), yang
menggunakan mata uang asing.
2. Pembayaran hutang dan penerimaan piutang yang menggunakan mata
uang asing.
3. Penjualan ataupun pembelian dengan mata uang asing yang bersifat
forward exchange contracts.
4. Pembelian ataupun penjualan dalam bentuk foreign currency units.
Penyesuaian terhadap ekuivalen nilai tukar mata uang U.S. dollar akan
menimbulkan laba rugi jika terjadi perubahan exchange rates.
• Contoh, Suatu perusahaan U.S. memperoleh €5,000 dari suatu bank pada
tanggal 1 Januari 2019, untuk melakukan pembelian pada perusahaan
Jerman, saat itu exchange rate is $1.20 = €1 maka perusahaan US akan
membayarkan pada bank $6,000 ( €5,000 × $1.20)
• Foreign Currency Units (€) 6,000
Cash 6,000

Pada tanggal 1 July 2019, the exchange rate is $1.10 = €1

Foreign Currency Transaction Loss 500
Foreign Currency Units (€) 500
Rugi = (1,20 - 1.10 ) x 5.000 = 500
 Foreign Currency Import and Export Transactions
1. Transaction date.
Mencatat transaksi pembelian dan penjualan dengan menggunakan U.S.
dollar– equivalent dengan exchange rate saat itu.
2. Balance sheet date.
Menyesuaian hutang dan piutang dengan menggunakan U.S. dollar–
equivalent nilai tukar mata uang pada akhir periode. dan mengakui laba
ataupun rugi dari exchange rate
3. Settlement date.
Penyesuaian nilai tukar saat pembayaran hutang dan penerimaan piutang
dengan nilai tukar pada tanggal laporan posisi keuangan
Illustration of Foreign Purchase Transaction
1. 1 October 2018, PT. P merupakan perusahaan di U.S. , membeli produk pada
Tokyo Industries di Jepang dengan harga $14,000, atau 2,000,000 yen.
2. PT. P menyajikan laporan keuangan pada tanggal 31 Desember 2018.
3. Pembayaran hutang usahanya tanggal 1 April 2019.
Exchange rates of the U.S. dollar–equivalent value of 1 yen adalah :
Date Direct Exchange Rate
1 October 2018 (transaction date) $0.0070
31 December 2018 (balance sheet date) 0.0080
1 April 1, 2019 (settlement date) 0.0076
Jika dalam U.S. Dollars
• Inventory 14,000
Accounts Payable 14,000
( Tanggal 1 Oktober 2018)

- No entry
(Tanggal 31 Desember 2018)

- Accounts Payable 14,000

Cash 14,000
( Tanggal 1 April 2019)
 Jika dalam bentuk Japanese Yen
• Inventory 14,000
Accounts Payable (¥) 14,000
( Tanggal 1 Oktober 2018) $14,000 = ¥2,000,000 × $0.0070 spot rate

• Foreign Currency Transaction Loss 2,000

Accounts Payable (¥) 2,000
Penyesuaian hutang usaha dalam foreign currency to current U.S. dollar
equivalent dan adanya rugi pertukaran ( 31 Desember 2018) :
$ 16,000 = ¥2,000,000 × $0.0080 Dec. 31 spot rate
−14,000 = ¥2,000,000 × $0.0070 Oct. 1 spot rate
$ 2,000 = ¥2,000,000 × ($0.0080 − $0.0070).
 ( Tanggal 1 April 2019)
• Accounts Payable (¥) 800
Foreign Currency Transaction Gain 800
Penyesuaian hutang dalam foreign currency to current U.S. dollar equivalent dan
mengakui laba pertukaran :
$ 15,200 = ¥2,000,000 × $0.0076 Apr. 1 spot rate
−16,000 = ¥2,000,000 × $0.0080 Dec. 31 spot rate
$ 800 = ¥2,000,000 × ($0.0076 − $0.0080).
• Foreign Currency Units (¥) 15,200
Cash 15,200
Acquire FCU to settle debt: $15,200 = ¥2,000,000 × $0.0076 April 1 spot rate.

• Accounts Payable (¥) 15,200

Foreign Currency Units (¥) 15,200
MANAGING INTERNATIONAL CURRENCY RISK WITH FOREIGN
CURRENCY FORWARD EXCHANGE FINANCIAL INSTRUMENTS
• Instrumen Derivative merupakan alat untuk memanaje risiko.
• Perusahaan multinasional sring menggunakan derivative instruments dalam
mengelola risiko dengan transaksi nilai tukar yang termasuk dalam foreign
currency–denominated forward exchange contracts, foreign currency options,
and foreign currency futures.
Derivatives yang memerlukan a hedge :
1. Fair value hedges are designated to hedge the exposure to potential changes in the fair
value of
( a ) a recognized asset or liability such as available-for-sale investments
( b ) an unrecognized firm commitment for which a binding agreement exists, such as to buy
or sell inventory
2. Cash flow hedges are designated to hedge the exposure to potential changes in the
anticipated cash flows, either into or out of the company, for
( a ) a recognized asset or liability such as future interest payments on variable-interest debt
( b ) a forecasted cash transaction such as a forecasted purchase or sale.
For cash flow hedges, changes in the fair market value of a derivative are separated into an
effective portion and an ineffective portion.
The net gain or loss on the effective portion of the hedging instrument should be reported
in other comprehensive income.
The gain or loss on the ineffective portion is reported in current earnings on the income
statement.
• 3. Foreign currency hedges are hedges in which the hedged item is denominated in a
foreign currency. Note that the incremental risk being hedged in a foreign currency
hedge is the change in fair value or the change in cash flows attributable to the
changes in the foreign currency exchange rates.
Types of hedges of foreign currency risk :
a. A fair value hedge of a firm commitment to enter into a foreign currency
transaction, such as a binding agreement to purchase equipment from a foreign
manufacturer with the payable due in the foreign currency or a recognized foreign
currency–denominated asset or liability (including an available-for-sale security).
b. A cash flow hedge of a forecasted foreign currency transaction, such as a probable
future foreign currency sale, the forecasted functional currency–equivalent cash flows
associated with a recognized asset or liability, or a forecasted intercompany transaction.

c. A hedge of a net investment in a foreign operation. A derivative designated as

hedging this type of foreign currency exposure has its gain or loss reported in Other
Comprehensive Income as part of the cumulative translation adjustment.
 Derivatives Designated as Hedges
• Contoh : Managing an Exposed Net Liability Position with a forward exchange
contract :
1. tanggal 1 Oktober 2018. PT. P membeli produk secara kredit pada Tokyo
Industries sejumlah 2,000,000 yen.
2. transaksi ini didenominasi dalam mata uang yen dan PT. P menyatakan
foreign currency liability with a forward exchange contract untuk penerimaan
2,000,000 yen dari a foreign exchange broker.
3. jangka waktu forward exchange contract adalah 6 bulan bersamaan dengan
periode kredit pada Tokyo Industries.
4. Tanggal 31 December merupakan tanggal penyusunan laporan keuangan PT. P,
hutang usaha dibayarkan tanggal 1 April 2019.
 U.S. Dollar–Equivalent Value of 1 Yen

Date Spot Rate Forward Exchange Rate

October 1, 2018 (transaction date) $0.0070 $0.0075 (180 days)
• December 31, 2018 (balance sheet date) 0.0080 0.0077 (90 days)
• April 1, 2019 (settlement date) 0.0076
 Jurnal yang diperlukan
• 1 Oktober 2018.
a. Inventory 14,000
Accounts Payable (¥) 14,000
Pembelian produk sebesar $14,000 = ¥2,000,000 × $0.0070 .
b. Foreign Currency Receivable from Exchange Broker (¥) 15,000
Dollars Payable to Exchange Broker ($) 15,000
Pembelian forward contract untuk penerimaan 2,000,000 yen:
$15,000 = ¥2,000,000 × $0.0075 forward rate.
Jurnal penyesuaian 31 Desember 2018 :
a. Foreign Currency Receivable from Exchange Broker (¥) 400
Foreign Currency Transaction Gain 400
Penyesuaian atas piutang yang didenominasi dalam yen ke current U.S. dollar– dengan
menggunakan forward rate:
$ 15,400 = ¥2,000,000 × $0.0077 Dec. 31 90-day forward rate
−15,000 = ¥2,000,000 × $0.0075 Oct. 1 180-day forward rate
$ 400 = ¥2,000,000 × ($0.0077 − $0.0075)
b. Foreign Currency Transaction Loss 2,000
Accounts Payable (¥) 2,000
Penyesuaian hutang usaha yang didenominasi dalam bentuk yen to current U.S. dollar–
equivalent value using the spot rate:
$ 16,000 = ¥2,000,000 × $0.0080 Dec. 31, spot rate
−14,000 = ¥2,000,000 × $0.0070 Oct. 1, spot rate
$ 2,000 = ¥2,000,000 × ($0.0080 − $0.0070).
April 1, 2019, the settlement date :
a. Foreign Currency Transaction Loss 200
Foreign Currency Receivable from Exchange Broker (¥) 200
Adjust receivable to spot rate on settlement date:
$ 15,200 = ¥2,000,000 × $0.0076 Apr. 1, 2019, spot rate
−15,400 = ¥2,000,000 × $0.0077 Dec. 31, 2019, 90-day forward rate
$ 200 = ¥2,000,000 × ($0.0076 − $0.0077).
b. Accounts Payable (¥) 800
Foreign Currency Transaction Gain 800
Adjust payable denominated in yen to spot rate on settlement date:
¥2,000,000 × ($0.0076 − $0.0080).
c. Dollars Payable to Exchange Broker ($) 15,000
Cash 15,000
Deliver U.S. dollars to currency broker as specified in forward contract.
April 1, 2019, the settlement date :
d. Foreign Currency Units (¥) 15,200
Foreign Currency Receivable from Exchange Broker (¥) 15,200
Receive ¥2,000,000 from exchange broker; valued at Apr. 1, 2019, spot rate:
$15,200 = ¥2,000,000 × $0.0076.

e. Accounts Payable (¥) 15,200

Foreign Currency Units (¥) 15,200
Pay 2,000,000 yen to Tokyo Industries Inc. in settlement of liability
denominated in yen.
The balance sheet prepared on December 31, 2018 :
Assets Liabilities and Equity
Forward Exchange Contract (¥)
(at net fair value) $400 Accounts Payable (¥) $16,000
Retained Earnings (for
net exchange loss) (1,600)

April 1, 20X2, balance sheet

Assets Liabilities and Equity
Forward Exchange Contract (¥)
(at net fair value) $200 Accounts Payable (¥) $15,200
Retained Earnings (for
amount of the premium) (1,000)