This excerpt taken from the HPQ 8-K filed Nov 12, 2008.
Assets and liabilities of non-U.S. subsidiaries whose functional currency is not the U.S. dollar are translated at current exchange rates. Revenue and expense accounts are translated using an average rate for the period. Translation gains and losses are reflected in the accumulated other comprehensive loss component of shareholders equity net of income taxes. Cumulative currency translation adjustment gains included in shareholders equity were $912 million, $502 million and $189 million at December 31, 2007, 2006 and 2005, respectively. Net currency transaction gains (losses) are reflected in other income (expense) in the consolidated statements of income and were $(18) million, $(18) million and $6 million, respectively, for the years ended December 31, 2007, 2006 and 2005.