They’re Not Synonyms
Transaction to Translation, Revaluation to Remeasurement
[M]isunderstandings and inaction perhaps create more confusion in this world than trickery and malice. At least the last two are certainly much less frequent.1
Johann Wolfgang von Goethe2
Financial reporting of multiple currencies requires you to maintain focus on the fundamental economics. However, the terminology remains important; you must know and use the terms correctly. More importantly, you need to understand the terms’ definitions and how to apply the underlying concepts correctly in practice.
Chapters 2, 3, and 5 left us with a certain confidence when working with currencies and exchange rates and in particular with exchange rate tables and currency translation. In this chapter we continue to explore more of the complexities in the standards.3 At times what we discuss might appear contradictory, esoteric, or even redundant in relation to what already has been discussed. It is not. Within the overall context of currency and financial reporting consider it teleological.
In practice there have been a number of misapplications of terminology and, worse, misapplication of the actual practice to which the terminology refers. Misapplications have a real impact on the reported results, potentially distorting the overall economic view.