Search within this section
Select a section below and enter your search term, or to search all click Foreign currency
Favorited Content
7.4 Intercompany dividends
Publication date: 31 May 2022
us Foreign currency guide
As a component of shareholders’ equity, dividends are recorded using the exchange rate at the declaration date. A dividend payable is a monetary liability which, when denominated in a currency other than the reporting entity’s functional currency, must be measured in the reporting entity’s functional currency. This measurement will produce foreign currency transaction gains and losses which should be recorded in net income.
Declared but unpaid dividends to a reporting entity by a foreign entity in the functional currency of the foreign entity have the following effect on the reporting entity’s consolidated financial statements:
- The foreign entity’s dividend payable is translated, with the foreign entity’s other accounts, into the reporting currency of the reporting entity with an offsetting entry to CTA.
- The reporting entity’s dividend receivable is a foreign currency transaction which must be measured in the functional currency of the reporting entity. This will cause an equivalent foreign currency transaction gain or loss.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Link copied
