Appendix A — Sample SEC Comments: Foreign Currency
The SEC staff’s comments on quantitative disclosures related to
foreign currency adjustments reflect published staff views1 on the topic, under which registrants should:
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“[R]eview management’s discussion and analysis and the notes to financial statements to ensure that disclosures are sufficient to inform investors of the nature and extent of the currency risks to which the registrant is exposed and to explain the effects of changes in exchange rates on its financial statements.”
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Describe in their MD&A “any material effects of changes in currency exchange rates on reported revenues, costs, and business practices and plans.”
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Identify “the currencies of the environments in which material business operations are conducted [when] exposures are material.”
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“[Q]uantify the extent to which material trends in amounts are attributable to changes in the value of the reporting currency relative to the functional currency of the underlying operations [and analyze] any materially different trends in operations or liquidity that would be apparent if reported in the functional currency.”
For a discussion of SEC comment letters on additional topics and
information about the SEC review process, see Deloitte’s Roadmap SEC Comment Letter Considerations,
Including Industry Insights.
Footnotes
1
Division of Corporation Finance: Frequently Requested
Accounting and Financial Reporting Interpretations and Guidance,
Section II.J.