Accounting treatment of foreign currency in multiple exchange rate economies

Abstract

Accounting has historically been a key tool in business decision-making and the assessment of organizations' financial health. In the Argentine economic context, the exchange rate gap, i.e., the difference between official and parallel market exchange rates, has had a significant impact on the Argentine economy and poses important accounting challenges.

This study focuses on analyzing whether accounting can adequately reflect the economic reality of companies in Argentina, considering changing regulations and various exchange rates, such as the Official Exchange Rate, Solidarity Dollar, Blue Dollar, and CCL Dollar, among others. The exchange rate gap has created a discrepancy between these prices, which complicates the valuation of assets, liabilities, and foreign currency transactions. This work also explores the possibility of Argentine companies to get dollars, detailing the current restrictions and regulations in the foreign exchange market.

This research uses a qualitative methodology that includes documentary collection of relevant regulations and publications, as well as the observation of real business situations. Through an analysis of accounting standards and doctrine, necessary adjustments in accounting practices are identified, such as the use of non-official exchange rate in certain situations.