Accounting of foreign exchange rates in the scope of Turkish Accounting Standard No 21 and an application about conversion of financial statements

Globalisation has removed the borders between countries and commercial activities of companies have been increased in recent years. As a result of this development there has been a need for common, understandable and qualified accounting information, so, company wise accounting politics and relevant financial tables had to be prepared according to internationally accepted standards. For this purpose, International Financial Reporting Standards have been developed and Turkey has accepted these standards. By year 2013, accounting records will be kept according to modified Turkish Financial Reporting Standards. Turkish Accounting Standard No 21 has an important place in these new standards.IAS 21 Effects of Changes In Foreign Exchange Rates on Financial Tables, which was published in 1983 has been updated starting from 1993 until now. TMS 21 Effects of Changes In Foreign Exchange Rates Standard was published on 31.12.2005 in Turkey and is an important step forward for accounting of changes in foreign exchange rates. Increase in international activities and foreign investment operations of companies have increased transactions based on foreign exchange rates, thus, this caused increase in differences in foreign exchange rates and TMS 21 has gained more popularity within the concept.