What are foreign currency operations? Foreign currency operations means those transactions that must be done with a currency different to the local one, included those operations that are done when an entity buys or sells goods or services which price is shown in foreign currency. When an entity learn or borrow capital, and the capital to pay or receive are shown in foreign currency, they are also considered foreign currency operations. All the foreign currency operations must be updated to the official exchange rate of every country, that will be the amount to pay or receive because of the debt, according to the exchange rate of every country.
Currency variations often affect cash or the equals to cash for those who get into debt with operations done in foreign currency.