(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009(b)(c)translate non-monetary items that are measured in terms of historical costin a foreign currency using the exchange rate at the date of the transaction;andtranslate non-monetary items that are measured at fair value in a foreigncurrency using the exchange rates at the date when the fair value wasdetermined.30.10 An entity shall recognise, in profit or loss in the period in which they arise,exchange differences arising on the settlement of monetary items or ontranslating monetary items at rates different from those at which they weretranslated on initial recognition during the period or in previous periods, exceptas described in paragraph 30.13.30.11 When another section of this IFRS requires a gain or loss on a non-monetary itemto be recognised in other comprehensive income, an entity shall recognise anyexchange component of that gain or loss in other comprehensive income.Conversely, when a gain or loss on a non-monetary item is recognised in profit orloss, an entity shall recognise any exchange component of that gain or loss inprofit or loss.Net investment in a foreign operation30.12 An entity may have a monetary item that is receivable from or payable to a foreignoperation. An item for which settlement is neither planned nor likely to occur inthe foreseeable future is, in substance, a part of the entity’s net investment in thatforeign operation, and is accounted for in accordance with paragraph 30.13.Such monetary items may include long-term receivables or loans. They do notinclude trade receivables or trade payables.30.13 Exchange differences arising on a monetary item that forms part of a reportingentity’s net investment in a foreign operation shall be recognised in profit or lossin the separate financial statements of the reporting entity or the individualfinancial statements of the foreign operation, as appropriate. In the financialstatements that include the foreign operation and the reporting entity(eg consolidated financial statements when the foreign operation is a subsidiary),such exchange differences shall be recognised initially in other comprehensiveincome and reported as a component of equity. They shall not again berecognised in profit or loss on disposal of the net investment.Change in functional currency30.14 When there is a change in an entity’s functional currency, the entity shall applythe translation procedures applicable to the new functional currencyprospectively from the date of the change.186 © IASCF