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3. Foreign currency translation
The translation of foreign currency transactions is done according to IAS 21 based on the
concept of functional currency. For all companies, this is their respective local currency,
since they operate their businesses independently with regard to financial, economic and
organizational aspects.
Therefore, the currency translation of assets and liabilities is based on the average rate
effective as of the balance sheet date. Income and expenses are calculated at the
average annual exchange rates (except for depreciation).
Differences in currency translation between the exchange rate effective on the balance
sheet date and the average exchange rate used for the income statement are recognized
under consolidated accruals.
Differences in currency translation resulting from the revaluation of equity vs. initial
consolidation are also recognized under consolidated accruals with a neutral effect on
operating income.
In the 2009-2010 business year, reporting date translation differences of –TEUR 1,776
(previous year: TEUR 8,700) were included in group equity and had no effect on net income.
For the foreign currencies material for the Group, the following conversion rates were
applied to the Consolidated Financial Statements:
Average
Closing rate annual rate
Currency in EUR 01/31/2010 01/31/2009 2009-2010 2008-09
Brazilian Real on 12/31 0.40230 0.30300 0.36353 0.37752
British Pound 1.15330 1.11140 1.12689 1.23813
Chinese Yuan on 12/31 0.10590 0.10410 0.10483 0.09856
Singapore Dollar 0.51290 0.51500 0.49409 0.48492
U.S. Dollar 0.72160 0.77690 0.71500 0.68925