Hubbell Policies

Assumption: GBP functional currency entity records a payable to vendor that will be settled in USD 10,000.

USD to GBP

GBP to USD

= 1/(GBP rate)

GBP value

Published rate:

Initial recording of payable

Transaction rate

1.65000 1.65680

0.60606 0.60357

(GBP 6,060.61) (GBP 6,035.73)

Current month EOM rate

FX gain/(loss)

GBP 24.87

Dr. Inventory Cr. Accounts Payable

GBP 6,060.61 (GBP 6,060.61)

To record transaction in functional currency

Dr. Accounts Payable GBP 24.87 Cr. FX gain (GBP 24.87) To record FX gain on transaction to be settled in entity's nonfunctional currency

Settlement of payable

Prior month EOM rate Rate @ time of settlement

1.65680 1.63000

0.60357 0.61350

(GBP 6,035.73) (GBP 6,134.97)

FX gain/(loss)

(GBP 99.24)

Dr. Accounts Payable Dr. FX Loss Cr. Cash

GBP 6,035.73 GBP 99.24 (GBP 6,134.97)

Proof:

(GBP 6,060.61) (GBP 74.36) (GBP 6,134.97) (GBP 6,134.97) GBP 0.00

A/P at initial transaction date Cumulative FX gain/(loss)

Actual cash settlement check

ADMINISTRATION Roles and Responsibilities. The Business Unit Controller is responsible to ensure compliance with this procedure.

Monitoring, Evaluation and Review. This Procedure shall be reviewed at least annually.

Exceptions. No exceptions to this policy and related procedure are permitted.

ACCOUNTING AND DISCLOSURE None

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