Foreign Currency — ASC 830 vs IAS 21

ASC 830 (US GAAP) and IAS 21 (IFRS) are largely converged on foreign currency: determine each entity’s functional currency, remeasure foreign-currency transactions, and translate to the reporting currency with the cumulative translation adjustment (CTA) in OCI. The notable divergence is hyperinflation.

• Functional currency — the currency of the primary economic environment in which the entity operates (the anchor for everything else).
• Transactions in other currencies are remeasured to the functional currency; monetary items at closing rates, with FX gains/losses in P&L.
• Translation of a foreign operation’s functional-currency statements to the reporting currency uses the current-rate method, with the CTA in OCI.

Area	US GAAP (ASC 830)	IFRS (IAS 21 / IAS 29)
Hyperinflationary economies	Use a more stable functional currency (remeasure as if functional)	Restate under IAS 29 for price-level changes, then translate
Functional currency / translation	Broadly aligned	Broadly aligned

• Functional currency determination — the primary economic environment.
• Identifying a foreign operation and its functional currency.
• Hyperinflation — when IAS 29 applies (IFRS).

• SAP implementation: SAP parallel currencies / currency types and the Material Ledger for multi-currency inventory — write-up forthcoming under SAP & Enterprise Systems. Translation is handled in Group Reporting.

An educational reference and original synthesis — not investment advice, and not a substitute for the standard or for professional accounting guidance. For authoritative measurement detail, consult ASC 830 / IAS 21 / IAS 29 directly.