Definition
A yearly report, FinCEN Form 114, required when U.S. persons have foreign accounts totaling more than $10,000 at any time during the year.
What it means
U.S. citizens, residents, including green card holders and many people who meet the substantial presence test, and U.S. entities must file an FBAR if they have a financial interest in or signature authority over foreign financial accounts whose combined maximum values exceeded $10,000 at any time during the calendar year. The report goes electronically to the Financial Crimes Enforcement Network (FinCEN), not to the IRS with your tax return. It is due April 15, with an automatic extension to October 15. Having a foreign account is legal; the FBAR is a disclosure. Penalties for failing to file can be serious. Separately, Form 8938 may be required with your tax return if foreign assets exceed higher thresholds. Interest earned abroad is generally taxable income.
Example
A green card holder with $6,000 in a bank account in Vietnam and $5,000 in another account in the same country has $11,000 combined, which is over $10,000, so an FBAR is required.
Illustrative numbers only. Your situation will differ.