Prophylactic: A preventive measure. The word comes from the Greek for an advance guard, an apt term for a measure taken to fend off a disease or another unwanted consequence. A prophylactic is a medication or a treatment designed and used to prevent a disease from occurring.
Changes in functional currency amounts that result from the measurement process are called transaction gains or losses; transaction gains and losses are included in net income. Foreign currency translation is the process of expressing a foreign entityâs functional currency financial statements in the reporting currency. Translation adjustments are included in the cumulative translation adjustment (CTA) account, which is a component of other comprehensive income.
(3) Accounting for hedging transactions. (1) Accounting for foreign currency transactions. Definitions and applicability. â¢ Transactions â Exporting (sales), importing (purchases), loans, borrowings. â¢ Applies to transactions which are denominated in a foreign currency. (other than the companyâs functional currency).