4 Conversion of Balance of Payments Transactions as a Source of Valuation Changes: Problems, Principles, and Practical Solutions


Compiling a country's economic accounts requires the recording of a large number of transactions, many of which will be expressed in a currency other than the unit of those accounts. For all such transactions, it will be necessary to convert the original values into the unit of account. When improperly conducted, however, conversion will introduce misleading information into the accounts. This problem can surface in compiling domestic transactions, but it will be most prevalent in compiling international transactions.

Author: Vicente Galbis