We have been transferring assets to a sister company outside of the United States. Because this is an intercompany transfer, we use the exchange rate of the date of acquisition, then depreciate the asset from the start using the exchange rate from each month with an adjusting currency gain/loss on the exchange. The parent company now wants to adjust the asset value based on the exchange rate at the time of transfer. What does GAAP say? How should the value of an asset be entered on the sister company books when an exchange rate is required? Because of the intercompany, I believe that the asset must maintain the original value at time of purchase. Any knowledge or direction on this is appreciated.
Thanks,
------------------------------
Jean Burns
Accountant
Ridgefield WA
United States
------------------------------