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Foreign exchange in individual financial statements

2.2 Overseas balances at the reporting date

The treatment of an overseas balance at the reporting date depends on whether it is
monetary or non-monetary.

IAS 21 defines monetary items as assets or liabilities that will lead to
the receipt or payment of a determinable number of currency units. This
includes cash, receivables, payables and loans.

Reporting date

Monetary items Non-monetary items

Retranslate using the Do not re-translate.
closing rate of exchange.
If held at fair value, then
Forex gains or losses to the fair value should be
P/L. translated using the rate
on the date it was
determined.

Illustrations and further practice

Now try TYU question 2 (b) and (c) from Chapter 6.

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