AKL 2 - TRANSAKSI VALAS PART 4 (PEMBAHASAN SOAL)

Summary

This transcript discusses four questions related to foreign currency transactions, explaining the process of accounting for foreign exchange gains and losses. The examples cover a range of scenarios, including sales and purchases in foreign currencies, loans, and settlements. Key topics include recognizing foreign exchange differences in income statements, adjustments for currency fluctuations, and the appropriate journal entries for each case. The video provides insights into how companies with functional currencies in US Dollars handle such transactions, offering detailed calculations and journal entries for each situation.

Takeaways

• 😀 The script discusses foreign exchange transactions and how to report exchange gains or losses in financial statements.
• 😀 Baim Corporation, a U.S.-based company, receives an order in Euros and reports an exchange gain when payment is received in USD due to exchange rate fluctuations.
• 😀 Yumi Corporation purchases inventory from a foreign supplier and recognizes an exchange loss of 600 USD due to changes in the exchange rate between the transaction and payment dates.
• 😀 The importance of understanding functional currency and transaction currency in foreign exchange accounting is emphasized, as different currencies affect reporting.
• 😀 Exchange rate fluctuations are a key factor in determining whether there is a gain or loss in foreign exchange transactions, which must be reflected in financial statements.
• 😀 The script provides a step-by-step guide on how to journalize foreign exchange transactions, including adjustments for exchange rate changes at various stages.
• 😀 For loans or borrowings denominated in foreign currencies, exchange differences are calculated and reported based on fluctuations in the currency's value over time.
• 😀 The exchange gain or loss is recognized in the income statement for the year the transaction is settled, which can significantly impact the company’s reported financial performance.
• 😀 In cases where transactions involve loans, interest, and principal repayments, exchange differences can affect both the principal amount and the accrued interest.
• 😀 The use of real-world examples, such as Baim Corporation's foreign sales or Yumi Corporation's foreign inventory purchase, helps illustrate practical accounting for foreign exchange transactions.
• 😀 The process of converting foreign-denominated values into a company’s functional currency (USD in these examples) is critical for accurate financial reporting.

Q & A

What is the core topic of the provided transcript?

The core topic of the transcript is the accounting treatment of foreign currency transactions, specifically how to handle foreign exchange gains and losses in the income statement based on exchange rate fluctuations.

In the first case, why does Baim Corporation report a foreign exchange loss?

Baim Corporation reports a foreign exchange loss because the value of the receivable in USD decreased when it was settled in full. The company initially invoiced the customer in euros, but by the time the payment was made, the exchange rate had changed, leading to a shortfall of USD 5,000.

How should exchange rate changes between transaction date and payment date be treated?

Exchange rate changes between the transaction date and payment date are treated as foreign exchange gains or losses. These changes affect the reported value of receivables or payables denominated in foreign currencies, and the difference is recognized in the income statement.

In Soal 2, why does Yumi Corporation report a foreign exchange gain in December 2020?

Yumi Corporation reports a foreign exchange gain because the exchange rate improved from USD 1.20 per euro on September 22 to USD 1.24 per euro by December 31, 2020. This resulted in a higher USD value for the euro-denominated payable.

How does the exchange rate change from March 20 to affect Yumi's payment?

On March 20, 2021, the exchange rate further improved to USD 1.30 per euro. This led to Yumi paying USD 13,000 (up from USD 12,000 originally recorded), resulting in an additional exchange gain of USD 600.

Why is a foreign exchange loss recorded in Soal 3, when Kampung Corporation borrows pesos?

Kampung Corporation records a foreign exchange loss in Soal 3 because the amount of the foreign currency debt increased in USD terms. Initially, the loan was equivalent to USD 210,000, but by December 31, 2020, the value had risen to USD 240,000 due to changes in the exchange rate.

What is the net foreign exchange effect for Kampung Corporation in the year 2020?

The net foreign exchange effect for Kampung Corporation in 2020 is a loss of USD 30,000, resulting from the increase in the value of the loan from USD 210,000 to USD 240,000 by December 31, 2020.

In Soal 4, how does Stone Corporation handle the foreign exchange gain/loss when lending to a foreign supplier?

Stone Corporation recognizes a foreign exchange gain when the value of the receivable increases from USD 120,000 to USD 140,000 by December 31, 2020, due to exchange rate fluctuations. However, when the loan is repaid in July 2021, a foreign exchange loss is recorded because the value of the receivable decreases due to a further change in the exchange rate.

How is the foreign exchange loss of USD 35,000 in Soal 4 calculated?

The foreign exchange loss of USD 35,000 in Soal 4 is calculated by comparing the receivable's value at repayment (USD 105,000) with the adjusted value (USD 140,000) at December 31, 2020, due to the exchange rate change from 7 pesos to 8 pesos per USD.

What key accounting principle is applied when dealing with foreign currency transactions in the examples provided?

The key accounting principle applied is the **functional currency principle**, where the foreign currency transactions are translated into the functional currency (USD for the companies in these examples) based on the exchange rates at the transaction date, the reporting date, and the settlement date, with any differences recognized as foreign exchange gains or losses in the income statement.