Page 15 - PowerPoint Presentation

THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES

Example - Revaluation Of Assets

COMMENT

• Non-monetary items which are measured at fair value, should be

measured using the exchange rates that existed when the fair values
were determined (IAS 21.23(c))

• The total increase results from the movement in the exchange rate

and the revaluation to fair value. The total movement is credited to
the revaluation surplus (IAS 21.30).

• If land was classified as an investment property, the fair value

adjustment would have been recognised in profit or loss. As a result

any foreign exchange component should also be recognised in profit

or loss (IAS 21.30).

• Financial assets measured at fair value through OCI (manditory

classification) is treated as a monetary item (IFRS 9.B5.7.2A).

• Financial assets measured at fair value through OCI (elected

classification) is not a monetary item (IFRS 9.B5.7.3).
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