Page 276 - F1 Integrated Workbook STUDENT 2018

Chapter 16

3.2 Subsequent measurement – unsettled transactions

The treatment of any foreign currency assets or liabilities remaining in the statement
of financial position at the yearend will depend on whether they are classified as
monetary or non-monetary.

Any exchange difference arising on the retranslation of monetary items must be
taken to the statement of profit or loss in the period in which it arises.

Monetary items Non-monetary items

Currency held and assets or liabilities to Other items in the statement of financial
be received or paid in a foreign currency. position.
E.g. non-current assets, inventory,
E.g. cash, receivables, payables, loans
investments
Treatment: Treatment:

Retranslate using the closing rate Do not translate
(year-end exchange rate) i.e. leave at historic rate

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