TUGAS AKUNTANSI INTERNASIONAL KE -2

NAMA : PUTRI KUSUMA P
NPM: 20208973 
KELAS:4EB11

REPORTING AND DISCLOSURE
A. DEVELOPMENT OF DISCLOSUREDevelopment of the disclosure system is closely associated with the development of accounting systems. Disclosure standards and practices are influenced by financial resources, legal systems, political and economic ties, the level of economic development, education, culture, and other influences.National differences in disclosure is driven largely by differences in corporate governance and finance. In the United States, Britain and other Anglo-American countries, equity markets provided most of the funding that the company needs to be very advanced. In these markets, ownership tends to spread widely among many shareholders and investor protection is emphasized. Institutional investors play an increasingly important role in these countries, demanding financial returns and increasing shareholder value.In most other countries (like France, Japan and some emerging market countries), share ownership is still highly concentrated and the bank (or the owner and family) has traditionally been a major source of corporate financing. These banks, and the other in obtaining more information about the company's financial position and activities.
 Voluntary DisclosureSome studies show that managers have incentives to reveal information about the company's current performance and future time voluntarily. In a recent report, the Financial Accounting Standards Board (FASB) describes a FASB project on business reporting which supports the view that the company will benefit from the capital market by increasing voluntary disclosure. The report outlines how companies can describe and explain its investment potential to investors.A number of rules, such as accounting and disclosure rules, and approval by a third party (such as auditing) can improve the functioning of the market. Accounting rules to try to reduce the ability of managers in record economic transactions in a manner that does not represent the best interests of shareholders. Disclosure rules establish provisions to ensure that shareholders receive timely, complete and accurate.Investors the world demanding more detailed information and more timely voluntary disclosure level is increasing both in developed countries and developing countries. Financial reporting to be a mechanism of communication with outside investors who do not complete if the incentives are not aligned with the interests of managers of all shareholders. Communications manager with outside investors would be incomplete if:A. Manager has the advantage of information about the company.2. Urge managers are not perfectly aligned with the interests of all shareholders.3. Accounting and auditing rules are not perfect.Company managers often delay disclosure of negative news and the financial statements further demonstrate the positive side of the company and assess more performance and financial prospects set perusahaan.Aturan disclosure provisions - provisions to ensure that shareholders receive timely, complete and accurate. While the external auditor to try to ensure that the accounting manager menenerapkan appropriate accounting policies, make a reasonable estimate, has a record of accounting and control systems provide adequate and timely disclosure. Choice of disclosure by managers and reflects the combined effect of the disclosure provisions and incentives to disclose information voluntarily. Mandatory Provisions and DisclosureStock exchanges and government regulatory agencies generally require that listed companies to foreign companies to share financial information and nonfinancial information similar to that required for domestic firms. Any information that was announced, which was distributed to shareholders or reported to regulatory agencies in the domestic market. However, most states do not monitor or enforce the implementation of the provisions of "suitability disclosure between the (jurisdiction)."Protection of shareholders differ from country to country. Anglo-American countries such as Canada, Britain and the United States to provide protection to shareholders who are widely and strictly enforced. In contrast, the protection to the shareholders received less attention in some other countries like China for example, prohibiting insider trading (trading that involves the inner circle), while weak law enforcement make the enforcement of these rules are almost non-existent.
 Reporting and Disclosure PracticesMandatory disclosure is the disclosure of accounting and reporting must be reported in accordance with Accounting Standards which embrace in their respective countries. The goal Investor Protection. Investor information and material through the monitoring and enforcement.In particular:1) Provide information material to investors.2) Monitor and enforce market rules.3) Addressing Cheating in a public offering, trading, voting and securities offerings.4) Trying to find comparability of financial information.Market CharacteristicsMarket is fair, orderly, and efficient system of free from abuse and error - error:A. Promote equal access to the information and the opportunity to view (equity market) mingkatkan liquidity and reduce transaction costs (market efficiency).2. Donated through the supervision and enforcement of freedom from abuse through monitoring and penegapan.The practice of disclosure in the annual report reflects the response of the manager of the provisions pengukapan issued by the regulator and the incentives they get if you provide information to users of financial statements voluntarily. If it is not required pengukapan pengukapan becomes voluntary. Company managers will not comply with disclosure rules if it raises compliance costs greater than the cost of non-compliance. It is important to distinguish between disclosure of the "required" and that obviously made the disclosure. Focus attention only to the rules of disclosure without a real look at the practice of disclosure would be misleading. Disclosure rules around the world are very different in some ways like Kasdan flow statement of changes in equity, related party transactions, segment reporting, the fair value of financial assets and liabilities and profit persaham.
 Disclosure to be discussed are:1) Disclosure of Seeing the FutureDisclosure of information to see the future is considered highly relevant in equity markets around the world. The term "information see the future" include:a. Forecast revenues, income (loss), earnings (loss) persaham, capital expenditures and other financial post.b. Prospective information regarding the performance or future economic position is not too sure when compared with the projection of the post, the fiscal period, and the projected amount.c. Reports of management plans and objectives of future operations.Most companies in each country presents a disclosure of information about plans and goals manjemen. Conversely fewer companies that disclose prophecy, from the lowest two companies in Japan and the highest 31 companies in the United States. Most forecasts in the U.S. and Germany regarding capital expenditure, not profits and sales.
2) Disclosure of SegmentInvestors and analysts will request information regarding operating results and financial industry segments classified as significant and increasing. Example, financial analysts in the United States has consistently been asked disagregat report data in the form of a much more detailed than they are now. International Financial Reporting Standards (IFRS) also discussed the highly detailed segment reporting. This report helps the users of financial statements to better understand how the parts of a company affects the whole enterprise.
3) Statement of Cash Flows and Flow of FundsIFRS and accounting standards in the United States, Britain, and a large number of other countries require the presentation of cash flows.
4) Disclosure of Corporate Social ResponsibilityToday the company is required to demonstrate a sense of responsibility to a bunch of so-called interested parties (stakeholders) - employees, customers, suppliers, governments, activist groups, and the general public.Information regarding the welfare of employees has long been a concern for labor organizations. The problem areas of concern related to working conditions, job security, equality of opportunity, workforce diversity and child labor. Employee disclosure also preferred by investors because it provides valuable input regarding labor relations, cost, and productivity.
5) Disclosure of Special For The Non-Domestic Users of Financial Statements and the accounting principles usedFinancial statements may contain specific disclosures to accommodate the users of financial statements nondomestik. Such disclosure is:a) Presentation repeated for the convenience "of financial information into currency nondomestik.b) Presentation of results and financial position over a limited basis according to the second keompok accounting standards.c) A complete set of financial statements prepared in accordance with accounting standards kesua groups, and some discussion about the differences between the accounting principles that are widely used in the primary financial statements and a few other sets of accounting principles.Many companies in countries that do not use English as primary language translation also perform throughout the annual report of the home country language into English. Also, some companies prepare financial statements in accordance with accounting standards more widely accepted than domestic standards (particularly IFRS or U.S. GAAP) or in accordance with both domestic and a second group of standard accounting principles.
 Implications for Users of Financial Statements And The ManagerThe managers of many companies are constantly heavily influenced by the cost of mandatory disclosure, the level of mandatory and voluntary disclosure is increasing worldwide. Managers in countries that traditionally have low disclosure should consider whether it operates a policy of disclosure may provide significant benefits in the amount of their company. Moreover, the managers who decided to provide more disclosure in areas considered important by investors and financial analysts, such as disclosure of segment and reconciliation, can gain competitive advantage from another company that has a strict disclosure policy.
B. MANAGEMENT AND DISCLOSURE ISSUES DECISION DECISIONProblem (problem) is a deviation between the should (should) happen in a real (actual) occurs, so that the cause should be found and verified.
• Decision MakingDecision-making (desicion making) is to assess and impose pilihan.Keputusan was taken after some calculations and considerations alternatif.Sebelum option was dropped, there are several steps that may be traversed by the decision maker. These stages may include identification of major problems, menyusn alternative will be selected and arrive at the best decision.
• Type of management activitiesManagement activities associated with its level in the organization is divided into 3 sections:1) Strategic planning is a top-level management activities, the environmental evaluation process outside the organization, implementation of organizational goals and determining strategies.= The process of evaluating the environment outside the organization: external environment can affect the course of the organization, therefore it must be good at the top level management to evaluate, react hrs interchangeable eye out kesempatan2 given by the external environment, eg new products, new markets. Besides the top-level management hrs tekanan2 of responsiveness to the external environment inimical organization and where possible convert pressure into an opportunity.= Setting goals is what igin achieved by the organization based on the vision is owned by management. For example, the company's goal is within the 5 years to be the biggest seller in the industry with a 60% market.= Determination of the strategy: Management of TKT on determining who tindakan2 hrs undertaken by the organization with the intention of achieving tujuan2nya remedy. With the strategy of all abilities who sumberdaya2 be deployed in order to achieve organizational goals.2) Management Control is a system to assure that the organization has already established a strategy to effectively and efficiently. This is a tactical level (Tactical Level), which is how middle management tactic to execute strategic planning can be done successfully. Run tactics are usually short term ± 1 year. Management control process consists of: the creation of the work program, budget preparation, execution and measurement, reporting and analysis.3) Operations Control is a system to assure that each particular task has been carried out effectively and efficiently. This is an application of a predetermined program in management control. Control operations performed under the management control process guidelines and focused on lower-level tasks.
• Types of Management DecisionsDecision-making (Decision making): is the selection of alternative management actions to achieve the target. Decision is divided into 3 types:a) Decisions programmed / structured decision: the decision repetitive and routine, so it can be programmed. Structured decision happens and is done mainly on the lower level manjemen. Example: a decision ordering products, making collection of accounts receivable, etc..b) Decision half fixed / semi-structured: that decision can be partly programmed, partly repetitive and routine and partly unstructured. These decisions are complex and often require calculations and detailed analysis. Example: The decision to buy a more sophisticated computer systems, making the allocation of campaign funds.c) The decision is not fixed / unstructured: a decision that does not happen again and again and not always the case. This decision occurred on the upper level management. Information for ill-structured decision-making is not easy to obtain and not readily available and usually come from the outside environment. Manager's experience is very important in decision making is unstructured. The decision to merge with another company is an example of unstructured decisions are rare.
• Type of InformationRole of information systems now ill just as the collection of data and process them into information such as financial reports, but who have a more important role in providing information for management functions of planning, alokas-allocation of resources, measurement and control. Reports from information systems to provide information to management about the problems that occurred within the organization to be the proof is useful in determining which action is taken. Information system provides three different types of information:1 Data Collection Information (Scorekeeping Information): the information in the form of an accumulation or collection of data to answer questions. Useful for the manager to evaluate the performance of personnel, personnel.Information Briefing Note 2 (Attention Directing Information): helps management focus on the problems of deviant, irregularities. This information helps middle management to see the distortions that occur.3 Information Troubleshooting (Problem Solving Information): information to help managers make decisions to solve the problems it faces. Problem solving is usually associated with a decision that was not repeated and the situation that requires the analysis carried out by upper management.
• Characteristics of InformationTo support the decision to be made by management, then management needs information that is useful. For each level of management with different activities, information needs are different, the characteristics of this information include:a. Information density: for the lower levels of management, characteristics of the information is detailed (detail) and less dense, mainly used to control the operation. Moderate to higher management levels, have the characteristics of the filtered information (filtered), more compact and dense.b. Wide Information: Under the management characteristics of the information is focused on a particular issue, because it is used by the managers who have a specific task. For high-level managers, characteristics of information is increasingly widespread, as the management problems associated with the area.c. Frequency Information: lower levels of management information it receives is the frequency of routine, because it is used by the manager who has the task is structured in a pattern that repeated over time. Manajem high level, frequency information is not routine or ad hoc (suddenly), because upper management does not relate to the structured decision-making patterns and the timing is not clear.d. Information Time: lower levels of management, the information required is historical information, as used by the manager in control of that check the operation of the routine tasks that have been happening. For high-level management, time to get over the future of predictive information as it is used for strategic decision-making concerning the future value.e. Information Access: Level below which requires inf period repeatedly, so it can be provided by the system that delivers information in the form of periodic reports. Thus can not access information on line, but can be off line. In contrast to the higher level, the period required information is not clear, so that the top-level managers need to be provided access on line to retrieve the information whenever they need.f. Source of Information: Due to the lower level of management is more focused on the company's internal control, the lower-level managers need more information with data sourced from the company's own internal, but the top-level managers are more oriented to the strategic planning issues related to the environment outside the company, so need information with external data sources in the company.
• Role of ManagementAccording to Henry Mintzberg, a management role consists of:1) Role of Interpersonal: the role of personal relationships may consist of: = figure head (figure head): the manager represents the organization for activities outside the organization. leader (leader): manager coordinating, controlling, motivating, and supporting subordinatesubordinates. Liaison (liaison): linking personal, personal managers at all levels of management.2) Informational Role: the role of managers as the central nervous system (nerve center) organizations to receive the latest information and as a propagator (disseminator) personal information throughout the organization. Other information is the manager role as a spokesperson (Spokesman) to answer questions about the information he had.3) Decisional role: conducted by the manager is as entreprenuer, as people who deal with the disorder, as those who allocate resources dayaorganisasi, and as a negotiator in the event of a conflict within the organization.
• Stages of Decision MakingSimon (1960) introduced the four activities in the decision making process:A. Intelligence: Gathering information to identify the problem.2. Design: the design phase of the solution in the form of problem-solving alternatives.3. Choice: choose from the solution phase of the alternatives provided.4. Implementation: Phase implement the decision and report the results.
C. PURPOSE OF DISCLOSURE ACCOUNTING IN EQUITY MARKETSIn a competitive economy, the disclosure is a means to channel koorperasi koorperasi accountability to capital providers (investors) and to facilitate allocation of resources to their most productive use.
Koorperasi a need to attract capital in a very large amount to finance the production and distribution activities are extensive. Therefore internal pembiyaan is highly dependent on external capital invested by the investor on a koorperasi, In return, an investor requires disclosure (tansparansi koorperasi) in which investors can assess the quality of their stock to cultivate.Conceptual link between increased disclosure and cost of capital of the theory of investment behavior under conditions of uncertainty, namely:A. In a world of uncertainty, investors look at returns on investment securities as money received as a consequence of ownership.2. Because of the uncertainty of return is viewed in a probabilistic sense.3. Investors use a number of different measures to quantify the expected results of a security.4. Investors prefer a high return rate for a certain risk level or vice versa.5. The value of a security is positively related to the flow of expected results and inversely related to the risks associated with the refund.6. Thus, disclosure of the company will increase the probability distribution of outcomes expected by investors by reducing the uncertainty associated with the refund. So will improve performance (performance of the company) in the eyes of investors that lure investors to invest on a larger similar securities so as to reduce the cost of capital.Accounting includes several broad processes:a) MeasurementProvide in-depth feedback on the probability of a company's operations and financial position of strength.b) DisclosureThe process by which accounting measurement is communicated to the users of financial statements and used in decision making.c) AuditingThe process by which the special accounting professionals (auditors) perform attestation (testing) on ​​reliability of measurement and communication processes.Development of accounting systems is driven by the growth of international trade in Northern Italy during the late Middle Ages and the government's desire to find ways to impose taxes on commercial transactions. "Bookkeeping Italian style" and then move on to Germany to help day traders and groups Hanseatik Fugger. At the same time the Dutch philosopher sharpen business income to calculate periodic and French governments to implement the whole system of government in planning and accountability.1850's double-entry bookkeeping reached the British Isles that causes the growth of public accounting and public accounting profession is organized in Scotland and England in the 1870s. UK accounting practice spread throughout North America and throughout the British Commonwealth. Besides the Dutch accounting model exported to Indonesia, among others, the French accounting system in Polynesia and Africa regions under French rule.Reporting framework of the German system is influential in Japan, Sweden, and the Russian Empire. First half of the 20th century, as the growing strength of the U.S. economy, the complexity of accounting issues arise simultaneously. Accounting then recognized as a separate academic discipline. After World War II, the influence of Accountancy increasingly felt in the Western World. For many countries, accounting is a national problem with national standards and practices that become embedded in national law and professional rules.
 Contemporary PerspectiveThere are a number of additional factors that add to the importance of studying international accounting. These factors and the significant reduction tumbah of persistent trade barriers and capital controls are nasioanal that has occurred over the progress of information technology.National controls on capital flows, foreign exchange, foreign direct investment and related transactions have been liberalized dramatically in recent years, so the resistance is reduced international business. Kemajuaan information technology led to radical changes in economic production and distribution.
 Growth and Spread of Multinational OperationsInternational business has traditionally been associated with foreign trade. This activity is rooted in the past, will continue. The main accounting issues related to export and import activities are accounting for foreign currency transactions. International business are increasingly associated with foreign direct investment, which include the establishment manufacturing or distribution system from abroad by establishing a wholly owned affiliates, joint ventures or strategic alliances.Operations are carried out outside the country makes financial managers and accountants face the risk of all kinds of problems they face when the operation is not implemented in the company of the country.The principle of national financial reporting may differ significantly from one country to another because of the accounting principles established by the different socio-economic environment. In addition there is a choice of the exchange rate used to convert foreign accounts into a single reporting currency.Financial managers and accountants must also understand the complexity of the environmental impact of accounting measurement of a multinational company, understand the effect of exchange rate changes and inflation is essential, knowledge of tax law and currency values ​​for the businesses that operate in more of the country.
 Global CompetitionOther factors also contributed the growing importance of international accounting is the phenomenon of global competition. Determination of reference (benchmarking), to compare the performance of an act of the parties with a reasonable standard is nothing new, but the standard of comparison used is now beyond national borders is nothing new. Examples of relevant questions "if I add much value to me compared to their customers located in other countries".
 Mergers and Acquisitions TransboundaryMergers are generally summarized by the term operating synergies or economies of scale, accounting plays an important role in this mega consolidation because the numbers generated fundamental accounting firms in the assessment process.National measurement differences can complicate the process of appraisal firms. For example, the company penialaian often based on a factor - factor-based pricing (price), such as price earnings ratio (P / E). The approach here is to reduce the average - average factor P / E for comparable companies in the industry and the application of this factor on earnings reported by companies that are rated to produce an adequate bid price.The main concern that the company will make acquisitions when the target is to offer a foreign acquisition is the extent to which factor E (earnings - earnings) in the size of the P / E is a reflection of precisely the variable being measured, when compared with results from differences in accounting measurement.
 Financial InnovationManejemen risk has become a popular term in the corporate environment and management. With the deregulation of financial markets and capital controls continue to be made, vollatilitas in commodity prices, foreign currency loans and equity become commonplace today. Berdasaran today's world financial managers need to be aware of the risks they face, decide which risks need to be protected and evaluate risk management strategies are executed. Although advances in technology allow the shifting of financial risk to others, but to measure the burden of risk between the parties are not transferable and are now on the part of a large group of market participants in other countries.
 Capital Market InternationalismThat many factors contribute more attention to international accounting among corporate executives, investors, market regulators, accounting standard makers and science educators is the internationalization of capital markets businesses around the world.Federation of World Capital Markets (World Federation of Exchanges) reports that domestic companies listed its shares rising in some markets and decreases in some other markets during periods of decades now, which is partly due to mergers and acquisitions, which also resulted in the delisting of shares (delisting) conducted several related companies.Three regions are the largest equity market, North America, Asia Pacific, and Europe.
North AmericaThe U.S. economy is experiencing growth and market share without interruption for the year 1990 in 2000, both the NYSE and Nasdaq stock exchanges dominate others around the world in terms of market capitalization, trading value of domestic stocks, foreign stocks trading value, capital of the newly acquired company is registered, the number of shares of domestic companies listed and the number of foreign companies that list their stocks.
AsiaAsia is expected to become the second most important equity markets. PRC (People's Republic of China) has emerged as a major global economy and the countries of the "tigers" experienced phenomenal growth and development.Some of the Asian financial crisis shows the vulnerability and immaturity of the economies in Asia and the slow growth of capital markets in the region. Plus the opinion of critics about the lack of accounting measurement, disclosure and auditing standards and monitoring the implementation and enforcement of these standards.However, future growth prospects in Asia looks strong equity markets. Market capitalization as a percentage of gross domestic product (Gross Domestic Product-GDP) in Asia is low compared to the United States and some major European markets, which suggests that equity markets can play a bigger role in Asia's economy.
Western EuropeEurope is the second largest equity market in the world in terms of market capitalization and trading volume. Economic expansion also contributed significantly to rapid growth in equity markets during the second half of the 1990s. Related factors in continental Europe is slowly changing orientation toward equity have long been features of London's equity markets and North America.
 European Equity MarketsEuropean capital markets are undergoing major changes in a short time, partly due to the globalization of world economy and the increasing economic integration within the European Union. The new culture of equity in Continental Europe. The growth of equity culture in Europe is the basis for estimating the continued growth in European equity markets.Intense competition among European exchanges lead to the development of a culture of equity, which then become more oriented to the investor to enhance the credibility and attract new listings. Many securities regulators and stock exchange markets of Europe has carried out more stringent rules and strengthening enforcement efforts. However, fierce competition also led to the stock exchanges and national regulators to facilitate the listing rules of stock and give a special exemption for the company issuing the stock.Although during the 1990's the company in the Continental European corporate governance has begun to attract new capital and investors, but many companies including the world's largest companies, is still far behind the standard of disclosure and listing of shares in the UK and North America.Recording and Publishing Shares of Borders. Wave of interest in doing cross-border listing of shares in the new markets of Europe, shows evidence that the company issuing the shares intended to keep records of cross-border in Europe to expand the group of shareholders, to increase awareness of their products and / or build community awareness of the company, especially in countries where the company has significant operations and / or customers.Many European companies have difficulties when deciding on which raise capital or list their stocks. Knowledge on various equity markets with the laws, rules and institutions of different character is treated today. Understanding of how the characteristics of the company issuing the shares and stock exchanges are interconnected is also required. Country of origin, industry, and the amount of shares publishing company offering just a few factors to consider. Costs and benefits of different combinations of the market also needs to be understood.D. DIFFERENT ASPECTS OF PRACTICE REPORTING AND DISCLOSURE Disclosure of Corporate GovernanceCorporate governance related to the internal tools used for running and controlling a firm - responsibility, accountability and the relationship between the shareholders, board members and managers are designed to achieve corporate objectives. The problems of corporate governance include the rights and treatment to the shareholders, the board's responsibilities, disclosure and transparency and the role of the parties concerned. Corporate governance practices has gained the attention of regulators, investors and analysts.
 Disclosure and Reporting Business Through the InternetWorld Wide Web is increasingly being used as channels of information dissemination, where the print media now plays a secondary role. Business Reporting Language (Extensible Business Reporting Language - XBRL) is an early stage of financial reporting revolution. This computer language is built into almost all software for accounting and financial reporting to be issued in the future, and most users do not need to learn how to cultivate it so that it can directly enjoy the benefits.
 Disclosure of Annual Report on Emerging Market CountriesDisclosure of the company's annual report on emerging market countries are generally less extensive and less credible than the reporting companies in developed countries. For example, the disclosure of which is insufficient and misleading and neglected consumer protection cited as the cause of the East Asian financial crisis in 1997.Low level of disclosure in emerging market countries is consistent with the system of corporate governance and finance in these countries. Less developed equity markets, banks and internal parties such as family groups distribute most pendanaa needs and generally not too much of a need for public disclosure of credible and timely manner, when compared with the more advanced economies.However, investor demand for information about the company in a timely and credible in emerging market countries more and more regulators to respond to this demand by creating more stringent disclosure provisions and increase surveillance efforts and enforcement.
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FOREIGN CURRENCY TRANSLATION

A. DIFFERENCES BETWEEN TRANSLATION AND FOREIGN CURRENCY CONVERSION
Translation is not equal to the conversion. Translation is just a change of monetary units, as well as a balance sheet presented are expressed in British pounds back into the U.S. dollar equivalent value. There is no physical exchange that occurred, and no related transactions that have occurred as it carried out the conversion.Balances in foreign currencies are translated into domestic currency equivalent value based on the foreign exchange rate is the price of one unit of a currency expressed in another currency. State's major trading currencies are bought and sold in global markets. With linked via a sophisticated telecommunications network, market participants include banks and other currency intermediaries, businesses, individuals and professional traders. By providing a place for the buyer and the seller's currency, the foreign exchange market to facilitate the international transfer payments (eg, from importers to exporters), allow for international sale or purchase on credit (eg, a bank letter of credit that allows the goods delivered to the buyer unknown prior to payment), and providing tools for individuals or businesses to protect themselves from the risk of the currency is unstable.Foreign currency transactions occur on the spot market, forward, or swap. Currency bought or sold on the spot generally must be sent as soon as possible, ie within 2 working days. Spot market exchange rate is influenced by many factors, including differences in inflation rates between countries, differences in national interest and expectations of the future exchange rate. Transaction on forward markets is an agreement to exchange one currency for a certain amount into another currency at a future date. Quotations on forward markets is expressed by the discount or premium of the spot rate.Swap transaction involves the purchase of spot and forward sales or spot sales or purchases forward, on a currency simultaneously. Investors often make use of swap transactions to take advantage of interest rates higher in a foreign country, the same opportunity to protect themselves against unfavorable movements of the exchange rate of foreign exchange.
B. TERMS IN FOREIGN CURRENCY TRANSLATIONA. Conversion, an exchange of one currency into another currency.2. Exchange rate now, the exchange rate prevailing on the date of the relevant financial statements.3. Net asset position at risk, the excess assets are measured or denominated in foreign currency and in translasikan at the exchange rate of duty is now measured or denominated in foreign currencies and translated at the exchange rate now.4. Exchange forward contracts, an agreement to exchange currencies of different countries by using a specific rate (forward rate) at a given date in the future.5. Functional currency, is the main currency used by a company in the conduct of business activities. Usually such currency is the currency. Countries where the company was located.6. Historical exchange rate, the exchange value of foreign currency that is used when an asset or liability denominated in foreign currencies bought or going.7. Reporting currency, the currency used in preparing the company financial statements.8. Spot exchange rate, the exchange rate for currency exchange in the time immediately.9. Translation adjustments, the adjustments arising from the translation of financial statements of a company's functional currency into the reporting currency.Glossary of foreign currency translation, adapted from GAAP (SFAS) No.52, 1981.A. Attributes, quantitative characteristics of an item being measured for accounting purposes. Example, historical cost and replacement cost which is an attribute of an asset.2. Conversion, pertukatan a currency into another currency.3. Present exchange rate, exchange rate prevailing on the date of the relevant financial statements.4. Discount, while the subsequent exchange rate lower than current levels.5. Net asset position at risk, as measured in excess of assets or denominated in foreign currencies and translated at the exchange rate of duty is now measured or denominated in foreign currencies and translated at the exchange rate now.6. Foreign currency, a currency other than the currency used by a State, a currency other than the reporting currency used by the company.7. Financial statements in foreign currencies, the financial statements using foreign currency as the unit of measurement.8. Foreign currency transactions, the transaction (ie sale or purchase of goods or services, or debt loans or accounts receivable) under the conditions stated in currencies other than the functional currency of the company.9. Foreign currency translation, the process to declare the amounts denominated or measured in one currency into another currency using the exchange rate between two currencies.10. Foreign operation, an operation that produces financial statements that (1) combined or consolidated or accounted for under the equity method in reporting the company's financial statements and (2) arranged in foreign currencies other than the reporting currency of the reporting enterprise.11. Forward exchange contacts, an agreement to exchange currencies of different countries by using a specific rate (forward rate) at a given date in the future.12. Functional currency, the currency used by suatau yanga major companies in the course of business, and in generating or using cash.13. Historical exchange rate, exchange rate of foreign currency that is used when an asset or liability denominated in foreign currencies bought or going.14. Local currency, the currency of a State that is used; the reporting currency used by a domestic or foreign operations.15. Items of monetary policy, the obligation to pay or the right to receive a unit of currency in a fixed value in the future.16. Reporting currency, the currency used in preparing the company financial statements.17. Completion date, the date when the debt is paid by an uncollectible receivables.18. Spot exchange rate, exchange rate for currency exchange in the time immediately.19. Date of the transaction, the date when a transaction is recorded in the accounting records of the reporting company.20. Translation adjustments, adjustments arising from the translation of financial statements of a company's functional currency into the reporting currency.21. Unit of measurement, the currency used to measure the assets, liabilities, revenues and expenses.Translation is the translation of foreign currency. Translation is a foreign exchange (governed by the IAD 21):a. Translation occurs when the subsidiary company has been significant, and there is MNC (Multy National Corporete).b. Translational change in different units into units of money.c. Bermaun translational crucibleTranslation is a translation process programming language (source code) to make a file or other form of display. Transalai process includes the terms: Compile, Interpret, and Link. Computer application programs (software) which is developed can be in three forms:A. Source-code2. Intermediate-code3. The executable codeThere is a two stage process of translation:A. Translation of the source-code to the intermediate-code2. Translation of the intermediate-code into executable codeVariations Translation ApproachTranslational approach in the form of computer program source-code into executable code:a) Full-interpretation. Translation of the source-code directly into executable code by using the stage sat alone.b) Mixed. Translation of the source-code to the intermediate-code is compiled (generated output file). Translation of the intermediate-code into executable code is interpret (not generated output file).c) Full-compilation. Translation of the source-code to the intermediate-code is compiled (no file output). Translation of the intermediate-code into executable code to be compiled as well (no file output). The word 'compile' is used as a term that generates the output file translation. Henceforth, the word compile meaningful 'translation of the source-code to the intermediate-code (which generates an output file). In practice, the use of this word so carelessly, it could mean anything.
C. DIFFERENCE OF PROFITS AND FOREIGN CURRENCY TRANSLATION losses,
If the point of view of local currency to be used (local companies viewpoint), the entry of the translation adjustment in current earnings do not need to be done. Enter translation gains and losses in earnings will distort the real financial relationships and can mislead the users of such information. Translation gains or losses should be treated from the standpoint of local currency as an adjustment to equity owners.If the parent company's reporting currency is the unit of measurement of the financial statements are translated (the parent company's point of view), it is advisable to recognize gain or loss on translation of profit as soon as possible. Point of view of the parent company saw overseas subsidiaries as an extension of its parent company. Translation gains and losses reflect the increase or decrease in equity of foreign investment in domestic currency and should be recognized.
D. BENEFITS AND FOREIGN CURRENCY TRANSLATION losses,1) SuspensionChanges in the value of domestic currency equivalent of the net assets of foreign subsidiaries are not realized and no effect on the local currency cash flows generated from foreign entities. Translation adjustment should be accumulated separately as part of consolidated equity.2) Suspension and AmortizationSuspension of translation gains or losses and to amortize it over the useful adjustment items related to the balance sheet, primarily related to debt ditangguha = kandan will be amortized over the related fixed assets, which is charged against earnings in the same way with the burden of depreciation or deferred and amortized during the remainder of the loan as an adjustment to interest expense.3) Partial SuspensionTranslation gains and losses is to recognize the losses as soon as possible after it happens, but admitted only after the profits realized, this is simply because it is an advantage, it ignores the changes in exchange rates.4) Not be suspendedRecognize translation gains and losses in the income statement as soon as possible. However, inserting translation gains and losses in the current year's profit will introduce a random element in the profits that may result in significant fluctuations in earnings in case of exchange rate changesTranslation gains and losses reflect the increase or decrease in equity investments in domestic currency and should be recognized.
E. EFFECT OF VARIOUS METHODS OF FOREIGN CURRENCY TRANSLATIONFINANCIAL STATEMENTS
Although most of the technical issues in accounting tends to resolve itself over time, foreign currency translation terrnyata is an exception. That this trend will continue to be supported by such developments as the collapse of the dominance of the dollar, the currency rate movements are approved by the government, and the globalization of world capital markets, which have increased the importance of reporting and financial disclosure. Such developments have profoundly increased interest ¬ executive-financial executives, accountants, and financial community on the importance and economic consequences of foreign currency translation. Let us look at the nature and development of international accounting puzzle is. Single Rate MethodBased on this translational approach, the financial statements of foreign operations, which are considered by the parent company as an autonomous entity, has the reporting of their own domicile. This is a local accounting environment where foreign affiliates are mentraksaksikan his business affairs. To maintain the "flavor" of the local currency reports, a way must be found so that translation can be implemented with minimal distortion. The best way is the use of the method of exchange rate policies.Since all financial reports of foreign exchange is actually multiplied by a konstansta, this translation method to maintain its financial results and the original relation (eg financial ratios) in the consolidated statements of individual entities that are consolidated. Only the form of overseas estimates, not the essence, the change in the method of exchange rate policies.Although interesting and conceptually simple, the method of exchange rate policies were blamed by some people because it undermines the basic purpose of the consolidated financial statements, that is because it presents, for the benefit of shareholders of the parent company, operating results and financial position of the parent company and firms from the perspective of children the single currency. maintain the parent company's reporting currency as the unit of measurement.In the prevailing exchange rate method, the results will reflect the consolidation of perspekfif-exchange perspective of each country where companies are children. For example, if an asset dip = roleh an overseas subsidiary company for when the rate was 1.000 VA VA 1 = $ 1, then from the perspective of historical cost dollars is $ 1,000; from the perspective of local currency is also $ 1000. If the exchange rate changed to VA 5 = $ 1, the historical cost of those assets from the perspective of the dollar (translas' historical cost) remains $ 1,000. If the local currency will be retained as the unit of measurement, will be expressed nifai assets of $ 200 (exchange rate translation effect).Rate method applies also to blame because it assumes that all assets are influenced by local-currency exchange rate risk (ie, assuming that the fluctuations in the domestic currency equivalent, which is caused by fluctuations translational running, an indicator of changes in the intrinsic value of those assets). Hat is rarely true because the value of inventory and fixed assets in foreign countries are generally supported by local inflation.
 Multiple Rate MethodsMethods of combining multiple exchange rate exchange rate historically runs and in the process of translation. 3 Such methods are discussed below.Force-historical method. Based on the true-historical approach, which is popular in the U.S. and other places before the year 1976, current assets and current liabilities of a subsidiary abroad are translated into the reporting currency using the exchange rate of its parent company applies. Assets and liabilities are non-smooth translated with historical rates.Items of income statement, except for depreciation and amortization, are translated at the exchange rate on average each month of operation or on the basis of the weighted average of the entire period to be reported. Depreciation and amortization are translated using historical exchange rates prevailing at the time of the relevant asset is obtained.This methodology is, unfortunately, has some drawbacks. For example, this method is less choose a conceptual justification. Existing definitions of assets and liabilities and non-current classification does not explain why such a manner which will determine the exchange rate used in the process transiasi. Monetary-nonmonetary method. As with any true-historical method, the method moniter using pattern-classification of non-monetary balance sheet to determine the exchange rate translation of monetary items tepat.Karena settled in cash; use of exchange applicable to translate the items of foreign exchange domestic currency equivalent yield that reflects the realizable value or value of the solution.Temporal method according to the temporal approach, translational currency conversion is a process of measurement (ie, repeated presentation of a particular value). Therefore, this method can not be used to change the attributes of an item that is being measured; this method can only change the unit of measurement. Balance of foreign currency translation, for example, just change the (restate) the denomination of inventory. not the actual assessment. In U.S. GAAP, assets are measured based on jumiah cash on hand at the balance sheet date. Receivables and payables expressed in a number expected to be received or paid at maturity. Liabilities and other assets are measured at the prevailing price when the item is acquired or item ¬ occurs (historical price). Even so, some of which are measured by the prices prevailing at the date of financial statements (the price goes), such as inventory under the rules of cost or market. In short, there is a dimension of time associated with the values ​​of this money.By Lorensen, the best way to maintain accounting bases are used to measure these items is to translate the foreign currency amount of foreign currency at the exchange rate prevailing on the date of the measurement of foreign currency takes place. Temporal principle thus stated thatcash, receivables, and payables are measured at the promised amount should be translated using the exchange rates prevailing at balance sheet date. Assets and liabilities are measured at the price of money should be translated using the exchange rates prevailing on the date with respect to the price of money.
F. METHOD OF EVALUATION AND SELECTION OF FOREIGN CURRENCY TRANSLATION
Translation methods can be classified into two types of methods that use a single exchange rate for the present re-translation of foreign currency balances to the equivalent value in domestic currency or a method that uses a variety of rates.A. Methods Single CurrencyThis method has long been popular in Europe, applying the exchange rate, the current exchange rate and the closing exchange rate, for all assets and liabilities lancer. Revenues and expenses denominated in foreign currencies are generally translated using the exchange rate prevailing at the time the posts are recognized. However, to facilitate these items are generally translated using the weighted average exchange rates are appropriate for the period. The financial statements of a foreign operation has its own reporting domicile, local currency environment in which the foreign affiliate companies do business. An asset or liability denominated in foreign currency is said to face foreign exchange risk if the equivalent in the currency used to translate the asset or liability.2. Multiple methods of exchange rateThe method combines Multiple Currency exchange rate exchange rate historically and now in the process of translation.3. Now the method-NonkiniBased on the Method of Non-Now-Now, lancer current assets and liabilities of foreign subsidiaries are translated into the reporting currency of its parent company based on the exchange now. Assets and liabilities are translated lancer historical rates of exchange. Items of income statement (except for depreciation and amortization) are translated based on the average rate prevailing in each month of operation, or based on a weighted average over the entire reporting period. Depreciation and amortization are translated based on the historical exchange rate recorded saaat assets acquired.However, this method does not consider the economic element. Using year-end exchange rate to translate the lancer assets implies that cash, receivables, and inventory in foreign currencies are equally at risk of exchange rate.4. Monetary-nonmonetary methodNon-monetary method Monetary also use the balance sheet classification scheme fatherly determine the appropriate exchange rate translation. Monetary assets and liabilities are translated based on the exchange rate now. Items of non-monetary assets, long-term investment, and stock investors are translated using historical exchange rates. Items of income statements are translated using a procedure similar to that described for the concept of non-present now.5. Temporal methodBy using the temporal method, tranlasi currency conversion is a process of re-measurement or presentation of a certain value. This method does not change the attributes of an item being measured, but only change the unit of measurement. Translation of these balances in foreign currency-denominated causes repeated measurements such items but not the actual assessment. Under U.S. GAAP, measured by the amount of cash on hand at the balance sheet date. Receivables and liabilities are stated at amounts expected to be received or paid at maturity.Under the temporal method, monetary items such as cash, receivables, and liabilities are translated based on the exchange now. Such items are translated at the exchange rate of monetary base that maintains in the first measurement. In particular, the value of assets in foreign currencies are reported at historical cost, are translated based on the historical exchange rate. This is because historical cost in foreign currencies are translated at the exchange rate exchange rate historically produces historical cost in domestic currency.These four methods discussed at one time been used in the United States and can be found even today in many countries. In general, these methods lead to the translation of foreign currency which is quite different. The first three methods (method of exchange rate now, the method now-non-date, and method-monetary non-monetary) are used in the identification of assets and liabilities which are at risk or may be protected from foreign exchange risk. Then, the translation method applied consistently by taking into account these differences.
7. Foreign currency translation relationship with inflationThe use of the exchange rate is now to translate the cost of non-monetary assets are located in berinflasi environment will ultimately lead to an equivalent value in domestic currency is much lower than the initial baseline measurement. At the same time, earnings will be much larger translated with respect to load depresisasi which is also lower. The translation as it can be more easily mislead readers as to give information to the reader. Assessment of the lower dollar typically lower earnings power akutal of foreign assets which are supported by local inflation and the ratio of return on investment that affected inflation in a foreign operation may create false expectations on future profits.FASB rejected before the inflation adjustment process of translation, because the adjustment is not inconsistent with the historical cost basis of the assessment framework used in the basic financial statements in the U.S.. As a solution FAS No. 52 requires the use of the U.S. dollar as the functional currency for those residing overseas operations with hyperinflation environment. This procedure will maintain a constant value of the dollar equivalent of foreign currency assets, because these assets will be translated according to the historical rate. The imposition of losses on fixed assets in the translation of foreign currency to equity shareholders will cause a significant effect on financial ratios. Foreign currency translation problem can not be separated from the problem of accounting for foreign inflation.
EXCHANGE RIGHT NOWSo far this term the exchange rate used in translation method refers to the historical or present exchange rate. The average rate is often used in the income statement for the posts load. Some countries use the exchange rate is different for different transactions. In this situation should be selected some existing exchange rate. Some suggested alternatives are:A. Currency dividend payment2. Free market rate, and3. Exchange rate penalty or preferences that can be used, such as those involved in import export activities.
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FINANCIAL REPORTING AND PRICE CHANGES
A. FINANCIAL STATEMENTS MAY HAVE THE POTENTIAL FOR MISLEADING PRICES DURING THE PERIOD OF CHANGEChanges the definition of priceTo understand the notion of price changes (changing prices), the following terms in use:A general price changes occur when the average price of all goods and services in an economy subject to change. Price increases are collectively known as inflation (inflation), while the price declines known as deflation (deflation).Specific price changes refers to changes in the price of goods or services which are caused by changes in demand and supply. A stable price level becomes a national priority for many countries around the world. Although the price changes occur throughout the world, the influence of business and financial reporting varies from one country to another.
 The lack of accuracy of measurement is distorted:A. Financial projections based on historical time series of data2. The budget is the basis of performance measurement3. Performance data can not isolate the effect of inflation that can not be controlled
 Profit is valued more in turn will lead to:a) An increase in the proportion of taxb) Request for more dividends of shareholdersc) Request for salaries and wages higher than the workers. Adverse action of the host country (such as the taxation of a huge advantage).
 Price Indexa) Changes in the general price level is usually measured by the price level.b) A price index is the ratio of the cost.The use of price index consists of:a) The price index number is used to translate the amount of money paid during the previous period to the equivalent purchasing power at the end of the period.b) Numbers - numbers that have been adjusted price levels do not represent the current cost items in question or the numbers are still the historical cost figures - historical cost figures are presented only repeated in the new measurement unit - the general purchasing power at the end of the period.
 Objects General Price Level AdjustmentA. Traditionally, profit is part of the company's assets that could be drawn by the company during an accounting period without reducing his wealth to below the starting position.2. Conventional accounting measure of profit as the maximum amount that can be drawn from the company without reducing the amount of money into capital initially.3. During inflation, the company will experience a change in wealth that is not related to operating activities which generally arises from changes in assets or liabilities.
B. INFLATION ACCOUNTING TERMS AND EFFECT ON PRICE ADJUSTMENTFINANCIAL STATEMENTSThe method used in inflation accounting is similar to the method of determination of the profits, the emphasis adalahpada more value relevant earnings are described by the financial statements, Whereas, the inflation value of all items contained in the financial statements. The method of measuring assets and liabilities can be divided as follows:A. The entry value of the common price system consisting of:a. Historical cost;b. General price level;c. Replacement cost;d. Reproduction cost2. The exit value or current market pricing system that consists of market value:a. Net realizable value;b. Selling price;c. Expexted value.
 General Price LevelThe advantages of using the General Price Level Adjustment (GPLA) is as follows:a. Explain the effect of inflation on the company;b. Improve the usefulness of comparative reports between periods;c. Help users assess the statement of cash flows in the future better;d. Improve the confidence level of financial statement ratios are calculated from the figures that have been customized reports.In addition to the advantage or the advantage of course, a method also has drawbacks. As for the weaknesses of the GPLA is as follows:a) Inflation occurs on different goods and different companies;b) GPLA not significant for the company;c) Figures are not adjusted to describe the cash flow;d) The ratio is a crude indicator.
 Current Cost AccountingIn this measuring method assumes that what is needed by managers is how they allocate economic resources that exist to maximize profit. Therefore we need answers to three questions:a. How many assets that must be owned at a specific date.b. How should the form of assets;c. How the assets financed.To make decisions about the three questions above, then the managers need to formulate expectations about the future events. Managers often face the problem of whether to retain an asset or debt or sell or pay for it and how to use or fund company. To answer this it is proposed the calculation of profit business that has two components:a) Current operating profitWhere income in excess of this component is the present value of the goods or services sold at a price substantially.b) the realizable cost saving (Holding Gain)Profit in this component is the increase in the cost of an asset is still owned today.Current cost five forms, namely:a. Replacement costIe the measured current value to obtain new assets or replace it with the same production capacity. This method has been criticized in terms of:1) The subjectivity of judgment or estimate of the price.2) In the case of an asset price decline then it will cause a reduction in charges to the income statement is lower than the load on the historical cost;3) the general price changes are not reflected in the replacement cost method, as it was for certain assets;4) It is hard to make comparisons between companies that differ from each other.b. Reproduction CostThis method is similar to the replacement cost.c. Net realizable valueWhich is a method in which the selling price less the costs of sale. NRV during inflation is greater than replacement cost because management may not sell the goods without expecting profit margins general price level. The method of depreciation is calculated based on the difference in sale price of assets at the beginning of the period compared to the end of the period.d. Selling PriceIn this method the values ​​used are the selling price less cost of sales so that no financial statements prepared according to the selling price will be greater than the net value reliazable and other methods.e. Expected valueThis method is highly dependent on the hope that someone can be larger or smaller than the other methods. This is because these values ​​represent the expected present value of cash in the future.
C. CURRENT COST ACCOUNTING MODEL DIFFERENCES AND CONVENTIONAL
In general, the conventional accounting, financial statements are presented based on the historical value that assumes that hargaharga (monetary unit) is stable. Conventional accounting does not recognize the changes in general price levels or changes in the level of rates. As a consequence, if there is a change in purchasing power as inflation period, the historical financial statements is economically irrelevant.In this period generally scored higher revenues while fixed assets valued lower. Actually, there are several methods of accounting on the effect of price changes, such as accounting fixed price, current value accounting, and general price level accounting. General price level accounting restatement will hold the components of financial statements into dollars at the same level of purchasing power, but did not change the accounting principles used in accounting based on the value historis.Pada practice, the controversy concerning the relevance of the use of price level accounting public still continues to this day. Some of the arguments that support or reject the application of the general price level accounting will be presented in this article. Similarly, the results of two studies on the effects of application of the general price level accounting on the financial statements will be compared to see whether the accounting adjustments based on the general price level is required. Historical Cost Financial Statements Statements of Financial Position1) The amount in the statement of financial position is not expressed in the units of measurement are now at the end of the reporting period, are restated by applying a general price index.2) monetary items are not restated because they are expressed in monetary units is now at the end of the reporting period. Monetary posts are owned and the money to be received or paid in cash.3) The assets and liabilities, with the agreement, which is connected with changes in prices such as index linked bonds and loans, adjusted in accordance with the agreement to ensure the balance at the end of the reporting period. The posts are recorded at amounts have been adjusted in the statement of financial position are restated.4) All other assets and liabilities are non-monetary. Some noted the number of non-monetary post is now at the end of the reporting period, such as net realizable value and fair value, then the post is not restated. All assets and liabilities to other non-monetary restated.5) Most of the non-monetary items carried at cost or cost less depreciation. Therefore, these items are stated at the amount present on the date of acquisition. Acquisition cost, or cost less depreciation, which are presented back to each item is determined by applying the change in the general price index from the date of acquisition until the end of the reporting period on a historical cost and accumulated depreciation. For example, fixed assets, inventories of raw materials and merchandise, goodwill, patents, trademarks and similar assets are restated from the date of purchase. Supply of intermediate goods and finished goods are restated from the date of the purchase cost and conversion costs.6) detailed notes on the acquisition of units of fixed assets may not be available or can not be estimated. In rare circumstances, it may be necessary, in the first period to implement this statement, to use an independent professional assessment of the value of such units as the basis for the presentation of the return.7) the general price index may not be available for a period of time restate fixed assets required by this Statement. Under these circumstances, an entity may need to use the basic estimates, for example, the transfer rate between the functional currency and foreign currencies are relatively stable.8) Some non-monetary posts are recorded on the number now on a date other than the date of acquisition or date of statement of financial position, for example, fixed assets have been revalued in the previous date. In this case, the carrying amount restated from the date of revaluation.9) The amounts are restated from net non-monetary items, in accordance with relevant GAAP, when the amount exceeds the recoverable amount. For example, the amount of fixed assets, goodwill, patents and trademarks presented again reduced to recoverable amount and restated amount of inventory reduced to net realizable value.10) the investee are recorded under the equity method may make a report in the currency hyperinflation economy. Statement of financial position and reports comprehensive income of the investee are restated in accordance with this Statement for the investor counting on net assets and profit and loss. When the financial statements of the investee are restated denominated in foreign currencies, the financial statements are translated at the closing exchange rate.11) The effect of inflation is usually recognized in borrowing costs. It is not appropriate to restate the capital expenditure financed by borrowing and to capitalize the borrowing costs to compensate for inflation over the same period. Part of this borrowing costs are recognized as an expense in the period when the cost occurs.12) An entity may acquire assets in a deal that allows entities to defer payment without incurring an explicit interest charge. When an entity is not practical to determine the amount of interest, then such assets are restated from the date of payment and not the date of purchase.13) At the beginning of the first period of application of this, a component of equity, except retained earnings and revaluation surplus, are restated using general price index from the date of the equity component is contributed or appear. Revaluation surplus that arose in previous periods is eliminated. Balance restated earnings from all other amounts in the statement of financial position14) At the end of the first period and subsequent periods, all components of equity are restated by applying a general price index from the beginning of the period or the date of contribution, if more recent. Shift in owners' equity during the period disclosed in accordance with IAS 1 (revised 2009). Presentation of Financial Statements. Comprehensive Income StatementThis statement requires that all items in comprehensive income statement are expressed in units of measurement are now at the end of the reporting period. Therefore, the entire amount necessary to implement the changes and display it in the general price index from the date income and expenses were initially recorded in the financial statements.
 Gain or Loss on Net Monetary PositionIn an inflationary period, if the entity has a monetary assets exceed monetary liabilities, the entity's purchasing power decreases, and if the entity has a monetary liabilities exceed monetary assets, then the purchasing power is increasing all the entities connected to a price level. Monetary position gain or loss is the difference in net non-monetary assets, and equity items in the comprehensive income statement are restated and the adjustment of index linked assets and liabilities. Gains or losses can be estimated using changes in the general price index to the weighted average over the period of the difference between monetary assets and monetary liabilities.Gains or losses net monetary position is included in the income statement. Adjustments to assets and liabilities linked to price changes in the agreement) with the offsetting gain or loss on net monetary position. Income and other expenses, such as income and interest expense and foreign exchange differences related to investments or loans, are also associated with the net monetary position. Although the post is separately disclosed, it can be helpful if the post is presented along with the gain or loss on net monetary position in the comprehensive income statement.
 Financial Statements Statements of Financial Position Costs NowItems that are presented at current cost are not restated because they are expressed in units of measurement are now at the end of the reporting period.
 Comprehensive Income StatementComprehensive income statement using the current cost, before restatement, generally reports costs are now at the time of the underlying transactions or events. Therefore, the entire amount is to be presented again in the unit of measurement is now at the end of the reporting period by using a general price index.
 Related FiguresCorresponding number in the previous reporting period, whether based on a historical cost approach or a current cost approach, are restated using general price index, so the comparative financial statements are presented in units of measurement are now at the end of the reporting period. Information disclosed in connection with previous periods is also expressed in units of measurement are now at the end of the reporting period. For the purpose of presenting comparative amounts in the presentation of foreign currency, applied IAS 10 (revised 2010).
 Consolidated Financial StatementsThe parent entity financial reports in the currency hyperinflation economy may have subsidiaries that also make a report in the currency hyperinflation economy. Entity's financial statements are restated the child's needs by using the general price index of the country whose currency is reported prior to inclusion in the consolidated financial statements issued by the parent entity. When a foreign subsidiary is an entity, then the restated financial statements are translated at the closing exchange rate. Entity's financial statements were reported in children who are not hyper-inflation economy currencies are treated according to Foreign Exchange.If financial statements with a different end of the reporting period are consolidated, all monetary and nonmonetary post need to be restated in the unit of measurement is now on the consolidated financial statements.
D. INFLATION ACCOUNTING DIFFERENCES IN THE U.S., ENGLAND, AND BRAZIL
Differences in inflation accounting in the United States, Britain, Brazil• State of the United StatesIn 1979, the FASB issued Statement of Financial Accounting Standards / SFAS No.33, entitled "Financial Reporting and Changing Values" statement requires U.S. companies that have supply and aktifa still worth more than $ 125 million or assets of more than $ 1 billion, for the past 5 years trying to make disclosure of constant purchasing power as the basic framework of the historical cost basis of measurement for the primary financial statements.Many users and compilers of financial information in accordance with SFAS No.33 found that:a. Double that required disclosure of FASB confusing.b. Double the cost of preparation of disclosure is too large.c. Disclosure of purchasing power historical cost is not too useful when compared to the current cost. Finally issued SFAS N0.88 to help companies that reported the effect of statements on the price change and become the starting point of future inflation accounting standards.Reporting company is encouraged to disclose the following information for each of the last 5 years:a) Net sales and other operating income.b) Income from continuing operations based on current cost basis.c) gain or loss of purchasing power (monetary) on net monetary items.d) Increase or decrease the current cost or recoverable amount (the amount of net cash is expected to be recovered through use or sale) is lower than inventory or fixed assets, net of inflation (the general price level changes).e) Each aggregate foreign currency translation adjustments, based on the present Biya, arising from the consolidation process.f) Net Assets at the end of the year according to the current cost basis.g) Earnings per share (from current operations) on the basis of current cost.h) Dividends per common share.i) the end of the market price per share of common stock.j) The Consumer Price Index (Consumer Price Index-CPI) used to measure income from current operations.To enhance the comparability of data, information can be presented in:a. Equivalent purchasing power of the average (or late), orb. Dollar base period (1967) are used in calculating the CPI.SFAS No.88 disclosure guidelines also include overseas operations included in the consolidated statements of U.S. companies holding company which, engadopsi dollar as the functional currency for its foreign operations measure looked at the operations from the perspective of the parent company's currency.As a result the accounts of the operation should be translated into dollars, adjusted for U.S. inflation. Multinational companies are adopting local currency as the functional currency for most of its foreign operations in light of the local currency.FASB is allowing companies to use the present re-translation method or adjust to the foreign inflation and then do a translation into U.S. dollars. Thus, the adjustment of the data to reflect the current cost inflation index can be based on the general price level of the U.S. or abroad.
• State of BritainUK Accounting Standards Committee / ACS issued a "Statement of Standard Accounting Practice 16 / SSAP," Accounting for Costs Now "for a trial period of 3 years in March 1980. Although SSAP 16 was canceled in 1988, the methodology is recommended for companies that voluntarily report accounts-their account adjusted for inflation.Differences SSAP 16 with SFAS 33 are:a. If the U.S. standard requires constant cost accounting and now, SSAP 16 only adopt the current cost for external reporting.b. If the adjustment of U.S. inflation based on the income statement, expense report in the UK now mengwajibkan both income statements and balance sheets are now charged, along with explanatory notes.3 British Standards allow reporting options:a) Presenting the accounts as a current cost basis financial statements with supplementary accounts of historical cost.b) Presenting the accounts of historical cost as the basis of financial statements with supplementary accounts of current cost.c) Presenting the accounts as a current cost-satuny dilengkanpi account with enough historical cost information.With treatment of gains and losses relating to monetary items, FAS 33 menharuskan separate disclosure for each digit. SSAP 16 mengaharuskan two numbers that both reflect the influence of specific price changes, namely:a. Monetary working capital adjustment (Monetary Working Capital Adjustment) / MWCAAcknowledging the influence of price changes specific to the total amount of working capital used by the company in its operations.b. The adjustment mechanismAllows the effect of price changes specific to non-monetary assets of the company.
• State of BrazilAlthough no longer required the recommended inflation accounting in Brazil today reflects two groups of reporting options, the Brazilian Corporate Law and Capital Market Supervisory Commission of Brazil. Inflation adjustment in accordance with the law firm presenting the accounts re-permanent assets and shareholders' equity by using a price index which is recognized by the federal government to measure the local currency devaluation.Inflation adjustment to permanent assets and shareholders' equity are presented net of the amount over that disclosed separately in the profit gain or loss is now as monetary correction.Price-level adjustments to equity shareholders are shareholders in the amount of investment which should grow to awalperiode not tertingla with inflation. Adjustments to assets permanently smaller than equity adjustments cause loss of purchasing power that reflects the risk faced by the company on the net monetary assets.The recommended inflation accounting in Brazil reflects the two groups reporting options, namely:a) The Brazilian Corporate LawPresenting the accounts re-permanent assets and shareholders' equity by using a price index which is recognized by the federal government to measure the local currency devaluation.b) Commission of the Brazilian Securities and Exchange CommissionRequires that the method of accounting for companies whose shares are publicly traded must resize all transactions that occur within a period by using the functional currency.At the end of the period, the index prevailing general price level to change the general purchasing power of the unit to be nominal local currency units. Also:a. Inventories are categorized as non-monetary assets and re-measured using the functional currency.b. Items of monetary non-interest bearing with maturities exceeding 90 days are discounted to present value to allocate profits and losses of inflation that occurred in the proper accounting period.c. Reclassified balance sheet adjustment also to the related items in the income statement.
E. FINANCIAL REPORTING IN THE ECONOMY hyperinflation
Financial Reporting in Hyperinflation Economic Statement of Financial Accounting Standard 63: Financial Reporting in Hyperinflation Economic consists of paragraphs 1-40. The entire paragraph has the power to set the same. Paragraphs which are printed in bold and italics to set the main principles. IAS 63 should be read in the context of goal setting and the Framework of the Preparation and Presentation of Financial Statements.IAS 25 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors provides a basis to select and apply accounting policies when no explicit guidance. This statement is not intended to apply to elements that are not material:A. This statement is applicable to the financial statements, including the consolidated financial statements of each entity that functional currency is the currency of an economy experiencing hyperinflation (hereinafter referred to as hyper-inflation economies).2. Hyperinflation in the economy, reporting of operating results and financial position in the local currency without restatement is not useful. Money loses purchasing power such that the ratio of the amounts of transactions and other events from time to time, even within the same accounting period, be misleading.3. This statement does not set at a certain level of inflation is considered hyperinflation. Consideration is required in determining when restatement of financial statements need to be done in accordance with this statement.Characteristics of the economic environment of a country which is an indication that the country is experiencing hyperinflation, among others:a) Its people prefer to store their wealth in the form of non-monetary assets or in foreign currencies are relatively stable. Amount of local currency held immediately invested to maintain purchasing power;b) people not consider the monetary amount in local currency but in foreign currencies are relatively stable. The prices may dikuotasikan in foreign currencies;c) the prevailing price in the sales and purchases on credit is determined by inserting a factor expected loss of purchasing power during the credit period, even if the short loan period;d) interest rates, wages and prices linked to price indexes, ande) the cumulative inflation rate over three years approaches or exceeds 100%.4. All entities that prepare financial statements in the currency of the same hyper-inflation economies are encouraged to apply this statement from the same date. However, this statement is applied to the financial statements of each entity since the beginning of the reporting period when the entity identifies the existence of hyperinflation in the country whose currency is used by such entities to prepare financial statements.5. Price change from time to time as a result of political influence, economic, social and general or specific. Specific influences such as changes in supply and demand and technological changes may cause individual prices increase or decrease significantly and independently from one another. In addition, the general effects can cause changes in general price levels and purchasing power of money.6. Entities that prepare financial statements on the basis of historical cost accounting do so without considering changes in general price level or a specific price increase of a recognized asset or liability. An exception to this principle is applied to the assets and liabilities as required, or elected, to be measured at fair value. For example, fixed assets are revalued at fair value. However, some entities present the financial statements based on current cost approach that reflects the impact of changes in specific prices of assets.7. Hyperinflation in the economy, financial statements, either prepared on the historical cost approach and cost approach now, it will only work if it is expressed in units of measurement that applies at the end of the reporting period. Therefore, this statement is applied to entities that provide financial statements denominated in hyperinflation economy. Entities are not allowed to present separate financial statements are not restated, although attaching the information required by this Statement.8. Entity's financial statements that functional currency is the currency hyperinflation economy, based on historical cost approach or a current cost approach, are presented in units of measurement that applies at the end of the reporting period. Corresponding figures for the previous period required by IAS 1 (revised 2009) Presentation of Financial Statements and any information in the previous period are also presented in the unit of measurement is now at the end of the reporting period. For the purpose of presenting comparative amounts in a different presentation currency, applied IAS 10 (revised 2010): Effects of Changes
F. CONSTANT DOLLARS ARE NOW OR COST (CURRENT COST) BETTER FOR MEASURING INFLATION EFFECT
Current CostAccording to Philips Edgar Edwards and Bell (1961) is the most intense character of this CCA concept. According merka required by managers is how they allocate economic resources available. Here are some current forms of cost:• Replacement cost is the value of the measured current (current cost) to obtain new assets or replace it with the same production capacity. In practice the change is only applied to non-monetary assets, like inventory, fixed assets. Disajiakan fixed assets according to the exchange, the value of the net after-described values ​​are used. Depreciation is calculated based on the value of changing it. At the time of inflation often occurs backlog depreciation or depreciation that bersaldo negative. In the presentation of this debt must be presented diskontonya value. On the value of the replacement value of inflation is greater than the general price level.This method has been criticized in terms of:• The subjectivity of judgment or estimate of the price so that the numbers that arise are not based on actual transactions.• In the case of an asset price decline that would cause the decrease in charges to the income statement (such as depreciation and cost of production) is lower than the load at historical cost. Finally, income will be higher than historical cost.• Changes in the general price is not reflected in the replacement cost method, as it was for certain assets. Therefore this method of replacement cost is not considered a method of inflation accounting• It is hard to make comparisons between companies that differ from each other.Although there is criticism, as the parties considered the easiest method is applied in accounting for inflation.
G. PREVENTION OF "DOUBLE-DIP"
At the time of her restate estimates beyond horrified to take into account foreign inflation, caution must be maintained to prevent the phenomenon of "double-dip". This problem arises from the fact that the local inflation impact directly on the exchange rate used in the translation process. Although economists generally assume an inverse relationship between a country's internal inflation rate with the external value of its currency, the evidence shows that such relationships are rare, at least in the short term. Therefore the magnitude of adjustments made to eliminate the phenomenon of double counting will vary depending on the level of negative correlation between the difference in inflation rates.Inflation adjustment to the cost of goods sold and depreciation expense are designed to suppress earnings "as reported" in order not terjadioverstate ment laba.meskipun so, due to the negative relationship between local inflation and currency values, changes in exchange rates between the financial statements of the other sequence, which in general attributable to inflation (at least for a certain period), will lead the company at least partly reflect the impact of inflation (ie the currency translation adjustment), the profits "as dilaporkanya". So to avoid double counting inflation, loss of translation that has been reflected in earnings "as reported" a company should be counted as part of the inflation adjustment.Over the relevant adjustment for multinational companies based in the U.S. for adopting the dollar as the functional currency of foreign operations by FA SB 52 and the translating inventory at the exchange rate goes. As for companies based in the European tendency toward the use of foreign exchange translation method runs. So that without it could result in an adjustment of profit is too low or too high profits due to inflation abroad be counted twice.
Reading materials:http://wartawarga.gunadarma.ac.id/2011/05/pelaporan-keuangan-dan-perubahan-harga-2/http://hedwigjapholic.blogspot.com/2011/05/perbedaan-akuntansi-inflasi-di-amerika.htmlhttp://ayrin-luph-gaza.blogspot.com/2011/06/pengaruh-penyesuaian-harga-terhadap.htmlhttp://eka1989.wordpress.com/2011/06/07/pelaporan-keuangan-dan-perubahan-harga/http://achie-achieblog.blogspot.com/2011/04/perbedaan-model-biaya-akuntansi-terkini.htmlhttp://wenysilvia130706.blogspot.com/2011/04/pelaporan-keuangan-dalam-perekonomian.html