VLKAY » Topics » Foreign Currency

This excerpt taken from the VLKAY 10-K filed Mar 22, 2010.

Foreign Currency

The local currency is the functional currency for locations in Canada, Mexico, the United Kingdom, the Netherlands, Hong Kong, and the Philippines. Assets and liabilities of those operations denominated in foreign currencies are translated into U.S. dollars using period-end exchange rates, and income and expenses are translated using average exchange rates for the reporting period. Gains or losses from the translation are recorded as currency translation adjustment in other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of income. In 2009, 2008, and 2007, transaction gains (losses) recognized in the statement of operations due to exchange rate changes were ($1,735), $2,364, and ($1,141), respectively. We also have certain intercompany loans that are deemed to be permanently reinvested. Transaction gains and losses on these intercompany loans are charged to cumulative translation adjustment in other comprehensive income.

 

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This excerpt taken from the VLKAY 20-F filed Dec 21, 2009.

(b) Foreign Currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date (except those representing the Group’s net investment in subsidiaries and associates – see below) are retranslated to the functional currency at the exchange rate at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to the functional currency (Australian dollars) at exchange rates ruling at the dates the fair value was determined.

 

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Foreign Currency (continued)

 

(ii) Financial statements of foreign operations

The assets and liabilities of foreign operations are translated to Australian dollars at exchange rates ruling at the reporting date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating the exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity described as ‘foreign currency translation reserve’.

(iii) Net investment in foreign operations

Exchange differences arising from the translation of balances representing the net investment in foreign operations are taken to the foreign currency translation reserve. They are released into the income statement upon disposal.

This excerpt taken from the VLKAY 8-K filed Dec 15, 2009.

Foreign currency

The Company uses the U.S. dollars for financial reporting purposes. The subsidiaries of the Company maintain their books and records in their respective functional currency, RMB and Hong Kong dollars, or HK$, being the lawful currency in the PRC and Hong Kong. Assets and liabilities are translated into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statement of operations are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income.

The exchange rates used to translate amounts in HK$ into U.S. dollars for the purposes of preparing the consolidated financial statements were as follows:-

  September 30, 2009 December 31, 2008 December 31, 2007
       
Balance sheet items, except for paid-in capital and US$1=RMB6.8289 US$1=RMB6.8346 US$1=RMB7.3046
retained earnings US$1=HK$7.7805 US$1=HK$7.780 US$1=HK$7.8325
       
Amounts included in the statements of income, US$1=RMB6.8322 US$1=RMB7.0696 US$1=RMB7.5567
statements of stockholders’ equity and statements of US$1= HK$7.7803 US$1= HK$7.8063 US$1=HK$7.8180
cash flows      

Although Chinese government regulations now allow convertibility of RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that RMB could be converted into U.S. dollars at that rate or any other rate.

The value of RMB against U.S. dollars and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of U.S. dollar reporting.

This excerpt taken from the VLKAY 8-K filed Dec 14, 2009.

Foreign Currency


The functional currency of the Company’s Canadian operations is the Canadian dollar.  Assets and liabilities of the Company’s Canadian operations are translated into U.S. dollars at end-of-period exchange rates. Revenues and expenses are translated at average exchange rates in effect for the period. Net currency exchange gains or losses resulting from such translations are excluded from net income and are accumulated in a separate component of shareholders’ equity as accumulated other comprehensive income (loss). Gains and losses resulting from foreign currency, which are not significant, are included in the consolidated statements of operations.


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