The Financial Accounting Standards Board (FASB) is a private, not-for-profit organization designated by the Securities and Exchange Commission. Its focus is to develop generally accepted accounting principles for companies within the United States to ensure the public interest. There are many standards within FASB for various purposes. Standard FASB 52 minds the international finance sector and exchange rates. Previously, FASB 52 was known as FASB 8. In December, 1981 it was modified, creating this standard easily accessible to interpret in order to implement it. FASB 52 is recorded on the balance sheet and is known as the cumulative translation adjustment account. FASB 52 focuses on the idea that a foreign subsidiaries' accounting and total amount of currency must be measured to the functional currency before it is translated over to the reporting currency. FASB 52 also differentiates the functional currency and the reporting currency. FASB 52 is used from firm to firm implementing the current rate method of translation of currency. It uses translation adjustments as well as transaction gains and losses. Translation adjustments are used to reconcile the differences between the functional and reporting currencies. FASB 52 can then be utilized to record transaction gains and losses of the currencies being used between different countries. Most global corporation can adjust liabilities and assets from the functional to reporting currency. FASB 52 enforces a way to safely and correctly record changes between currencies for with corporation many subsidiaries within different countries. Transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Gains and losses on those foreign currency transactions are generally included in determining net income for the period in which exchange rates change unless the transaction hedges a foreign currency commitment or a net investment in a foreign entity. Intercompany transactions of a long-term investment nature are considered part of a parent's net investment and hence do not give rise to gains or losses.   Works Citedhttp://www.fasb.org/summary/stsum52.shtml. Accessed July 6, 2009.