【正文】 he Second World War, leaders of the major industrial nations set out to create an economic system that would not be susceptible to the risk of another depression. One significant result of their efforts was a fixed exchange rate system established in a conference at Bretton Woods, New Hampshire, in 1944 (Gordon, 1987, p. 544). For some years, the Bretton Woods system worked well. But, economic pressures soon came to bear again and nations began to depart from the agreement by devaluing their currencies in relation to the US dollar. The resulting instability created new interest in foreign currency accounting. In 1948, . Hecker, an English chartered accountant, described the reporting situation of the time as follows: “Increasing chaos in foreign currency rates makes impossible general rules for handling statements of foreign subsidiaries” (Hecker, 1948). The economic situation raised many questions about the appropriateness of the currentnoncurrent method. One of the critics was Samuel R. Hepworth who is usually given primary credit for developing the moarynonmoary method of translation (Hepworth, 1956, p. 8). Moary assets and liabilities are those which are fixed in terms of a number of units of a foreign currency. Nonmoary assets and liabilities are not so fixed. The currentnoncurrent method, however, prevailed as the only acceptable method until October 1965 when the Accounting Principles Board (APB) Opinion No. 6, in substance, permitted the use of the moarynonmoary method. The Opinion stated that it might often be appropriate to translate longterm receivables and longterm payables, which are essentially moary assets and liabilities, at current exchange rates (APB, 1965). At this time, both methods were used in practice and accepted by the authoritative bodies. The exchange rate effects of the Vietnam War 7 The problems with the Bretton Woods system became more acute in the 1960s owing to an acceleration of inflation in the USA, relative to the inflation rates of other countries because of the heavy spending by the US government on the Vietnam War and an easy moary policy. This change in relative inflation rates caused a decline in US exports and an increase in US imports (Gordon, 1987, p. 545). This change in trade structure made it impossible to maintain a system of fixed exchange rates between the USA and other countries. By 1971, it was clear that a more equitable system had to be devised. That year, the Smithsonian Agreement was made which essentially put the world in a flexible exchange rate system by 1973 (Gordon, 1987, p. 546). Accounting Research Study No. 12 In June 1972, the Accounting Research Division issued Accounting Research Study No. 12, “Reporting foreign operations of US panies in US dollars”, by Leonard Lorensen. This ARS reviewed the currentnoncurrent and moarynonmoary methods then in practice in the USA, as well as the current rate method which had been remended by standard setting bodies in England and Scotland (Lorensen, 1972, p. 8). This latter method translates all assets and liabilities at the exchange rate effective on the balance sheet date. The FASB’s efforts to standardize accounting for foreign currency translation The FASB Statement No. 8 was one of the most heavily criticized pronouncements issued by the FASB. The chief objection to the statement was the required recognition of all exchange gains and losses, whether realized or not, in the ine statement. Hence, in 1981, FASB Statement No. 52, “Foreign currency translation”, replaced the controversial Statement No. 8. It wa