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This article analyzes new FASB requirements for reporting foreign cash flows and develops a methodology for implementation.

June 15, 2026

Foreign Currency Translation and the Cash Flow Statement.

Key Points

This article analyzes new FASB requirements for reporting foreign cash flows and develops a methodology for implementation.
Conceptual analysis of FASB Statement 95
Development of a methodology for interpreting reporting requirements
Examination of exchange rate selection for cash flow translation
Clarified relationship between foreign currency translation and cash flow statements
Identified key considerations for U.S. companies in implementing translation guidelines
Outlined methodologies for translating historical cost balances effectively

Abstract

Abstract This article provides a conceptual analysis of the new requirements issued by the Financial Accounting Standards Board (FASB) for reporting foreign cash flows in the U. S. dollars and develops a methodology to aid in interpreting and implementing those requirements of U.S. companies. FASB Statement 95 has effectively analyzed the relationship between foreign currency translation and the statement of cash flows. Translation of the income statement requires selecting exchange rates to translate repetitive transactions occurring during a time period as well as amortizations of historical cost balances.

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