Determination Of Standard Currency For Bookkeeping In Overseas Operations
There are two aspects of overseas operations. Meaning First, it refers to the son of an enterprise outside the country. company Joint ventures, joint ventures and branches; two, when a company's subsidiary, joint venture, joint venture or branch office in the country chooses the bookkeeping standard currency, which is different from the enterprise's bookkeeping standard currency, it should also be regarded as an overseas operation. Determine overseas Management It does not depend on whether the location is abroad or not, but depends on whether the selected bookkeeping standard currency is the same as the enterprise's bookkeeping standard currency.
In addition to considering the factors mentioned above, enterprises should also take account of the following factors:
First, whether overseas operations have strong autonomy in their activities.
If the activities undertaken by overseas businesses are regarded as an extension of the business activities of enterprises and constitute an integral part of the business activities of the enterprises, the overseas operation should choose the same currency as the bookkeeping standard currency of the enterprise as the bookkeeping standard currency. If the activities undertaken by overseas businesses have great autonomy, the same currency as the bookkeeping standard currency can not be chosen as the bookkeeping standard currency in overseas operations.
Two, whether the pactions with enterprises in overseas business activities occupy a large proportion in overseas business activities.
If the proportion of overseas business and business pactions in overseas business activities is relatively high, overseas operations should choose the same currency as the bookkeeping standard currency of the enterprise as the bookkeeping standard currency, otherwise, other currencies should be chosen.
The three is whether the cash flow generated by overseas business activities directly affects the cash flow of enterprises and whether they can be remitted at any time.
If the cash flow generated by overseas business activities directly affects the cash flow of an enterprise and can be remitted at any time, the foreign currency shall be the same currency as the bookkeeping standard currency of the enterprise as the bookkeeping standard currency, otherwise, other currencies should be chosen.
The four is whether the cash flow generated by overseas operations is enough to repay its existing debts and predictable debts.
If the enterprise does not provide funds, if the cash flow from the overseas operation is difficult to repay its existing debt and the expected debt under normal circumstances, the overseas operation should choose the same currency as the accounting standard currency as the accounting standard currency, and on the contrary, the other currencies should be selected.
In the light of the above, when an enterprise determines that the enterprise bookkeeping standard currency or its overseas operating bookkeeping standard currency, when a variety of factors are mixed together and the bookkeeping base currency is not obvious, it should give priority to (1) one or two factors, then consider the money obtained from the financing activities, keep the money used in collecting money from the business activities, and (two) factors to determine the bookkeeping standard currency.
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