2.5 Change in Reporting Currency
ASC 830 does not specifically address a change in reporting currency (i.e., the currency in which the financial statements are presented). The FASB staff has said that it would permit some sort of “convenience translation” (i.e., the translation of an entity’s financial statements from its reporting currency into another currency for the convenience of readers) if the change in reporting currency was necessitated by a change in the parent’s functional currency. However, the FASB staff prefers a restatement of the prior periods as though the information originally had been presented in the new reporting currency.
SEC Considerations
In accordance with SEC Regulation S-X, Rule 3-20(e), if an SEC registrant changes its reporting currency, it is required to “recast its financial statements as if the newly adopted currency had been used since at least the earliest period presented in the filing.” In addition, the registrant should disclose the “decision to change and the reason for the change in the reporting currency” in the period in which the change occurs.