report

2.6 Foreign currency translation
The consolidated financial statements are prepared in Swiss franc. For the individual
Group companies, the respective local currency is the functional currency.
Foreign currency transactions are translated into the functional currency at the ex-
change rate prevailing on the date of the transaction. Gains and losses that result
from foreign currency transactions, or from the translation at the year-end rate of
monetary assets and liabilities denominated in foreign currencies, are recorded
in the income statement.
On consolidation, all assets and liabilities in balance sheets prepared in foreign cur-
rencies are translated into the Group’s reporting currency using year-end exchange
rates. Income and expenses recorded in income statements prepared in foreign
currencies are translated into the Group’s reporting currency at average exchange
rates for the year. Exchange differences arising from those translations are allocated
directly to retained earnings in the balance sheet. Foreign currency differences
arising from the valuation of longterm loans with equity character between Group
companies are – like net investments in a foreign operation – recorded in equity,
with no effect in the income statement, until re payment.
When a Group company is sold, the currency translation differences booked to
equity are offset against the net sales proceeds and charged to the income statement.
The following CHF exchange rates are used for the Group’s major currencies:
2011 ISO code Unit
12
Balance
sheet
Income
statement
Euro EUR 1 1.22 1.23
Hong Kong HKD 1 0.12 0.11
China CNY 1 0.15 0.14
USA USD 1 0.94 0.89
Hungary HUF 100 0.39 0.44
Poland PLN 100 27.52 29.87
Czech Republic CZK 100 4.73 5.02
2010 ISO code Unit
Balance
sheet
Income
statement
Euro EUR 1 1.25 1.38
Hong Kong HKD 1 0.12 0.13
China CNY 1 0.14 0.15
USA USD 1 0.94 1.04
Hungary HUF 100 0.45 0.50
Poland PLN 100 31.61 34.51
Czech Republic CZK 100 4.99 5.46
Romania RON 100 29.21 32.86