Effect of Exchange Rate Differences Relating to Receivables and Payables in Consolidated Financial Statement

The entities, that have to translate its results and financial position from its functional currency into a presentation currency for purpose of consolidation, use the method, under these assets and liabilities are translated at the closing rate, and income and expenses are translated at the exchange rates at the dates of the transactions. This paper refers to particular problems in the process of consolidation related to conversion of receivables and payables denominated in foreign currency and costs and revenues as result of these transactions as well.