Exchange difference - Revision history

imported>Doug Williamson: Layout.

2022-03-05T16:32:44Z

Layout.

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	Under IAS 21, exchange differences arising when monetary items are settled - or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous financial statements - are reported in profit or loss in the period, with one exception.		Under IAS 21, exchange differences arising when monetary items are settled - or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous financial statements - are reported in profit or loss in the period, ''with one exception.''


	The exception is that exchange differences arising on monetary items that form part of the reporting entity's net investment in a foreign operation are recognised - in the consolidated financial statements that include the foreign operation - in other comprehensive income.		The '''exception''' is that exchange differences arising on monetary items that form part of the reporting entity's net investment in a foreign operation are recognised - in the consolidated financial statements that include the foreign operation - in other comprehensive income.

	Those exchange differences are then recognised in profit or loss on disposal of the net investment.		Those exchange differences are then recognised in profit or loss on disposal of the net investment.

imported>Doug Williamson: Add link.

2022-03-05T16:32:10Z

Add link.

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	The exception is that exchange differences arising on monetary items that form part of the reporting entity's net investment in a foreign operation are recognised, in the consolidated financial statements that include the foreign operation, in other comprehensive income.		The exception is that exchange differences arising on monetary items that form part of the reporting entity's net investment in a foreign operation are recognised - in the consolidated financial statements that include the foreign operation - in other comprehensive income.

	Those exchange differences are then recognised in profit or loss on disposal of the net investment.		Those exchange differences are then recognised in profit or loss on disposal of the net investment.
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	* [[Other comprehensive income]]		* [[Other comprehensive income]]
	* [[Profit and Loss account]]		* [[Profit and Loss account]]
			* [[Recognition]]
	* [[Translation risk]]		* [[Translation risk]]

imported>Doug Williamson: Mend link.

2022-03-05T16:31:14Z

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	* [[Non-monetary items]]		* [[Non-monetary items]]
	* [[Other comprehensive income]]		* [[Other comprehensive income]]
	* [[Profit and ~~loss~~ account]]		* [[Profit and Loss account]]
	* [[Translation risk]]		* [[Translation risk]]

imported>Doug Williamson: Layout.

2022-03-05T16:30:20Z

Layout.

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	:It is critical that the treasurer is able to articulate the materiality of any impacts to the company and its operations and what additional steps are being taken to mitigate any existing or potential risks that may emerge or become significant.		:It is critical that the treasurer is able to articulate the materiality of any impacts to the company and its operations and what additional steps are being taken to mitigate any existing or potential risks that may emerge or become significant.

	::Will you need to take any impairment charges?		::- Will you need to take any impairment charges?

	::Will you need to assess any Cumulative Currency Translation Differences in the balance sheet that may have an impact on the Income Statement following divestment / impairment?		::- Will you need to assess any Cumulative Currency Translation Differences in the balance sheet that may have an impact on the Income Statement following divestment / impairment?

	::Will this and other changes potentially affect any of your covenants?"		::- Will this and other changes potentially affect any of your covenants?"

	''Russia-Ukraine: a treasurer's checklist - Association of Corporate Treasurers - 3 March 2022.''		:''Russia-Ukraine: a treasurer's checklist - Association of Corporate Treasurers - 3 March 2022.''

imported>Doug Williamson: Create page - source - ACT - https://www.treasurers.org/hub/blog/russia-ukraine-checklist-march-2022

2022-03-05T16:29:34Z

Create page - source - ACT - https://www.treasurers.org/hub/blog/russia-ukraine-checklist-march-2022

New page

''Foreign currency - translation - IAS 21.''

An exchange difference is the difference resulting from translating a given number of units of one currency into another currency at different exchange rates.

Under IAS 21, exchange differences arising when monetary items are settled - or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous financial statements - are reported in profit or loss in the period, with one exception.

The exception is that exchange differences arising on monetary items that form part of the reporting entity's net investment in a foreign operation are recognised, in the consolidated financial statements that include the foreign operation, in other comprehensive income.

Those exchange differences are then recognised in profit or loss on disposal of the net investment.

:<span style="color:#4B0082">'''''Russia-Ukraine - investor relations'''''</span>

:"Investors, lenders and credit rating agencies may want to understand the extent of any direct or indirect exposures resulting from the invasion of Ukraine.

:It is critical that the treasurer is able to articulate the materiality of any impacts to the company and its operations and what additional steps are being taken to mitigate any existing or potential risks that may emerge or become significant.

::Will you need to take any impairment charges?

::Will you need to assess any Cumulative Currency Translation Differences in the balance sheet that may have an impact on the Income Statement following divestment / impairment?

::Will this and other changes potentially affect any of your covenants?"

''Russia-Ukraine: a treasurer's checklist - Association of Corporate Treasurers - 3 March 2022.''

== See also ==
* [[Consolidated group accounts]]
* [[Covenant]]
* [[Credit rating agency]]
* [[Cumulative currency translation differences]]
* [[Cumulative exchange differences]]
* [[Currency]]
* [[Divestment]]
* [[Foreign exchange]]
* [[Foreign operation]]
* [[IAS 21]]
* [[IFRIC 22]]
* [[Impairment]]
* [[Income statement]]
* [[International Financial Reporting Standards]]
* [[Investor relations]]
* [[Materiality]]
* [[Monetary items]]
* [[Non-monetary items]]
* [[Other comprehensive income]]
* [[Profit and loss account]]
* [[Translation risk]]

== External link ==
*[https://www.iasplus.com/en/standards/ias/ias21 IAS 21 - IAS Plus]

[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]