Approximate exchange rate refers to the systematic and rational method to determine the approximate exchange rate, usually the spot average exchange rate or weighted average exchange rate. When there is little change in the exchange rate, in order to simplify accounting, the enterprise usually choose the spot exchange rate as the approximate exchange rate. The method for determining the approximate exchange rate should be consistent throughout all periods. If fluctuations in exchange rates makes the spot exchange rate not suitable as the approximate rates of exchange, the spot exchange rate at the transaction date should be used instead. As to when is appropriate and when inappropriate, the enterprise need to judge according to foreign exchange market fluctuation situation.
Approximate exchange rate refers to the systematic and rational method to determine the approximate exchange rate, usually the spot average exchange rate or weighted average exchange rate. When there is little change in the exchange rate, in order to simplify accounting, the enterprise usually choose the spot exchange rate as the approximate exchange rate.
The method for determining the approximate exchange rate should be consistent throughout all periods. If fluctuations in exchange rates makes the spot exchange rate not suitable as the approximate rates of exchange, the spot exchange rate at the transaction date should be used instead. As to when is appropriate and when inappropriate, the enterprise need to judge according to foreign exchange market fluctuation situation.
