Summary of Statement No. 70

Financial Reporting and Changing Prices: Foreign Currency Translation—an amendment of FASB Statement No. 33 (Issued 12/82)

Summary

This Statement amends FASB Statement No. 33, Financial Reporting and Changing Prices, to implement revisions to the supplementary information about the effects of changing prices necessitated by changes in the method of translating foreign currency financial statements set out in FASB Statement No. 52, Foreign Currency Translation. However, this Statement has no effect on the reporting of supplementary information about changing prices by enterprises for which the U.S. dollar is the functional currency for all significant operations. The provisions of Statement 33 continue to apply to those enterprises.

An enterprise that measures a significant part of its operations in functional currencies other than the U.S. dollar is exempted from Statement 33's requirements to present historical cost information measured in units of constant purchasing power. Enterprises without significant amounts of inventory and property, plant, and equipment that have used historical cost information measured in units of constant purchasing power to satisfy Statement 33's current cost requirements may continue to do so.

Operations that use functional currencies other than the U.S. dollar should measure current cost amounts and increases or decreases therein in the functional currency. Adjustments to current cost information to reflect the effects of general inflation may be based on either the U.S. CPI(U) or functional currency general price level indexes.