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Thailand: Currency conversion rules, financial statement items

Thailand: Currency conversion rules, financial items

The Ministry of Finance issued guidelines providing rules for the conversion of any items in financial statements (including currency, asset, and liability) of a company or juristic partnership that adopts a foreign currency (other than Thai baht) as its functional currency.

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A company or juristic partnership that notified or has obtained approval from the Director-General of the Revenue Department must:

  • Convert any items in the financial statements (including currency, asset, and liability) on the last day of the accounting period before the transition to functional currency in accordance with accounting principles and be certified by the auditor under the prescribed rules, methods, and conditions
  • Convert any currency, asset, and liability balances that are not in functional currency at the end of accounting period into functional currency by using one of the following methods:
    • The average rate between the buying and selling rates of commercial banks, as ascertained by the Bank of Thailand—if this is not viable for certain parts, an approval from the Director-General of the Revenue Department must be obtained in order to apply other rates for such parts.
    • The average buying rate or the average selling rate of the commercial banks as ascertained by the Bank of Thailand—if this is not viable for certain parts, an approval from the Director-General of the Revenue Department must be obtained in order to apply other rates for such parts.

The method (above) adopted by the company or juristic person must be applied consistently, and any subsequent changes must be approved by the Director-General of the Revenue Department.

Read an April 2020 report prepared by the KPMG member firm in Thailand

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