A foreign currency transaction should be recorded initially at the rate of exchange at the date of the transaction (use of averages is permitted if they are a reasonable approximation of actual).
At each subsequent balance sheet date, foreign currency monetary amounts should be reported using the closing rate non-monetary items, carried at historical cost should be reported using the exchange rate at the date of the transaction. Non-monetary items carried at fair value should be reported at the rate that existed when the fair values were determined.
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Disclosure
- The value of exchange differences recognised in profit or loss (excluding differences arising on financial instruments measured at fair value through profit or loss in accordance with IAS 39)
- Net exchange differences recognised in other comprehensive income and accumulated in a separate component of equity and a reconciliation of the value of such exchange differences at the beginning and end of the period.
- When the presentation currency is different from the functional currency, disclose that fact together with the functional currency and the reason for using a different presentation currency.
- A change in the functional currency of either the reporting entity or a significant foreign operation and the reason therefor.
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Now Read: Foreign Currency Transactions
