How to determine maximum account value and convert it to U.S. dollars
Short answer
For FBAR reporting, you generally determine the maximum value of each account during the calendar year in the account's own currency, then convert that maximum value to U.S. dollars using the applicable Treasury year-end exchange rate.Source 1Source 2 The reported value is not simply the balance on December 31.
Step 1:Determine the maximum value in the account currency
FinCEN describes the maximum value as a reasonable approximation of the greatest value of currency or nonmonetary assets in the account during the calendar year.Source 1 Periodic statements may be relied upon when they fairly reflect the maximum account value for the year.Source 1
This means “use the December statement” or “use one statement per quarter” is not a safe universal rule. The evidence has to support the annual maximum. If a statement series misses a materially higher balance or asset value, the year-end or sampled figure is not the correct maximum merely because it is convenient.
Step 2:Convert the maximum value to U.S. dollars
For an account denominated in a foreign currency, FinCEN instructs filers to convert the maximum account value using the Treasury Reporting Rate of Exchange for the last day of the calendar year being reported.Source 1 If no Treasury rate is available for the currency, another verifiable exchange rate may be used and its source should be provided.Source 1
The Treasury FiscalData exchange-rate dataset is the government source used for Treasury Reporting Rates of Exchange.Source 3 Before valuing an account, confirm that it is within the foreign-account categories reported on an FBAR.
Step 3:Report the value using the required rounding convention
FinCEN instructs filers to report U.S.-dollar amounts rounded up to the next whole dollar.Source 1
Maximum value and the $10,000 threshold are different calculations
For practical FBAR threshold determination, the Form 114 instructions direct the filer to determine the annual maximum value of each account separately, convert each maximum to U.S. dollars, and aggregate those maximum account values.Source 1Source 2 The maxima do not have to occur on the same date. The resulting values are used in the $10,000 aggregate-threshold test.
Example
Maxima occur in different months
Transfer safeguard
IRS examination guidance states that money moved from one foreign account to another foreign account during the year should be counted only once.Source 2
Interpretation
Some official material describes the statutory trigger as aggregate value exceeding $10,000 “at any time,” while the filing instructions operationalize the test by aggregating each account's separately determined annual maximum.
Related questions
Do I use my December 31 balance as the FBAR maximum?
Not necessarily. FBAR reporting generally uses the maximum value reached during the calendar year. December 31 is relevant to the exchange rate used for conversion, not automatically to the account balance reported.Source 1
Can I rely on monthly or quarterly statements?
Periodic statements may be used when they fairly reflect the account's maximum value for the year.Source 1 A statement series that misses a materially higher balance is not sufficient merely because it is convenient.
Which exchange rate do I use?
FinCEN instructs filers to use the Treasury Reporting Rate for the last day of the calendar year being reported. If Treasury does not provide a rate for the currency, another verifiable rate may be used with its source identified.Source 1
Do account maxima have to occur on the same date for the $10,000 threshold?
What if the same money was transferred between two foreign accounts?
IRS examination guidance says money moved from one foreign account to another during the year should be counted only once when determining aggregate maximum value.Source 2
Next pages
Sources
Official sources used for this page.
Source 1: FinCEN, Reporting Maximum Account Value (opens in a new tab)
Maximum-value determination, periodic statements, FX method and rounding.
fincen.govChecked Back to text
Source 2: IRS, IRM 4.26.16 — Report of Foreign Bank and Financial Accounts (opens in a new tab)
Account valuation, year-end conversion and aggregate-value/transfer guidance.
irs.govChecked Source updated Back to text
Source 3: U.S. Treasury, FiscalData — Treasury Reporting Rates of Exchange (opens in a new tab)
Government source for Treasury Reporting Rates of Exchange.
fiscaldata.treasury.govChecked Back to text