Regulatory Alerts1994-03-14
Instruction No. 94-05 of March 14, 1994, on the Accounting for Foreign Currency Transactions, as Amended by Instruction No. 2009-02 of June 19, 2009
The Banking Commission issued Instruction No. 94-05, consolidated with amendments from 2009, to establish detailed accounting rules for foreign currency transactions, including spot, forward, and derivative operations. The regulation mandates specific off-balance sheet and balance sheet recording methods for currency swaps, options, and hedging activities, while defining how to handle exchange rate differences, latent gains, and provisions for illiquid markets. It further specifies the criteria for qualifying hedges, the treatment of collateral deposits, and the reporting requirements for financial instrument commitments.
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