This paper[1] empirically examines the accounting and the economic effects of foreign exchange rate fluctuations on the oil and gas industry under the former and the current translation accounting standards in Australia. Due to the unique features of the oil and gas industry and based on an analysis of the former standardstralian Accounting Standards Board (AASB) 1012, the authors predict that a positive translation adjustment (the accounting effect) is associated with a loss, instead of a creation of the firm value (the economic effect) under AASB 1012. The authors also predict that the new standard AASB 121, adapted from the International Accounting Standard (IAS) 21 with modifications, will report translation adjustments that are consistent with the economic effects. By using Australia-based multinational oil and gas firms, the authors find that translation adjustments under AASB 1012 are inversely associated with firm value and that the relationship changes to a positive one under AASB 121. This study concludes that the new standard has the potential to improve the quality of the translation accounting information.