IAS FX

Hello sir I am making a project report on the topic of IAS 21 The Effects of Changes in Foreign Exchange Rates, so can you give me related information about on this topic

As you are saying you are doing work on IAS 21 The Effects of Changes in Foreign Exchange Rates project , so here I am some inoframtion which I have this time

International Accounting Standard (IAS) 21
The Effects of Changes in Foreign Exchange Rates
IAS 21 first issued in July 1983
IAS 21 revised in December 2003
Recent amendment: by IAS 27 amended in January 2008

Functional Currency
--> currency of primary economic environment
--> operations are carried out in functional currency

Presentation Currency
--> financial statements are prepared in presentation currency

Translation from functional currency to presentation currency

(1) Assets and liabilities
--> closing rate
--> spot exchange rate at the end of reporting period

(2) Income and expenses
--> exchange rates at transaction dates
--> average rate for the period is allowed, if reasonable

Initial recognition of foreign currency transaction
--> recorded in functional currency
--> using the spot exchange rate between foreign currency and functional currency
--> at transaction date

At the end of reporting period

(1) foreign currency monetary items
--> translated using closing rate

(2) non-monetary items measured by historical cost (in a foreign currency)
--> translated using exchange rate
--> at transaction date

(3) non-monetary items measured by fair value (in a foreign currency)
--> translated using exchange rate
--> at the date
--> when the fair value was determined

Exchange differences on a monetary item
--> recognized in profit or loss

For a non-monetary item

(1) if a gain or loss is recognized in other comprehensive income
--> exchange component of such a gain or loss
--> recognized in other comprehensive income

(2) if a gain or loss is recognized in profit or loss
--> exchange component of such a gain or loss
--> recognized in profit or loss

Foreign currency derivatives and hedge accounting
--> covered by IAS 39 Financial Instruments: Recognition and Measurement.
--> not covered by IAS 21

IAS 21 The Effects of Changes in Foreign Exchange Rates

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