When a U.S. company makes a credit sale to an international customer and the sale terms are for payment in a foreign currency, the foreign exchange rate used to record the sale is the exchange rate:

Question

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The exchange rate used to record the sale should be the rate on the date of the sale, as this accurately reflects the value of the transaction at the time it occurred. Waiting 30 days or until the end of the buyer's or seller's fiscal year could result in an inaccurate exchange rate being used, leading to misstated financial statements. The exchange rate at the date of final payment may also be different from the exchange rate at the time of sale, leading to further complications.

When a US Company Makes a Credit Sale to an International Customer