§ Mr. John Moore
asked the Chancellor of the Exchequer, to the extent that private corporations are unable to utilise variable exchange rates to their advantage, and in view of the possibility of confusion among observers who seek to separate in their study of their accounts the effects of transactions as well as valuation charges, if he will take steps to report 407W the sterling series in a non-artificial manner, or alternatively, if he will give private corporations similar reporting flexibility to the reserve announcements.
§ Mr. Dell
There is a range of possible techniques for valuation of the official reserves. To cater for several different interests, the end-month reserves series are provided on several different bases. There is no single generally-accepted accounting practice on the way in which companies value their foreign currency-denominated assets. I understand that the accounting profession both in the United Kingdom and abroad is considering this question at present. But in respect of foreign currency flows, both the public and private sectors normally convert into sterling for accounting purposes at the relevant market exchange rate at the time of the transaction. For example, the changes in the United Kingdom reserves exhibited in the balance of payments statistics inEconomic Trends are converted in this way.