IAS 21 — Foreign transactions and entities

IAS 21 — Foreign transactions and entities

Definition

The currency of the primary economic environment in which the entity operates.

It is the currency in which the financial statement transactions are measured.

Reporting foreign currency transactions in the functional currency(外币交易如何做)

初始计量

Translate each transaction by applying the spot exchange rate between the functional currency and the foreign currency at the date of transaction (an average rate for a period may be used as an approximation if rates do not fluctuate significantly).

At the end of the reporting period

(a) Monetary assets and liabilities

Restate at closing rate.

(b) Non-monetary assets measured in terms of historical cost

(e.g. non-current assets, inventories)

Do not restate (i.e. they remain at historical rate).

(c) Non-monetary assets measured at fair value

Use exchange rate at date when fair value was measured.