IAS 21 Foreign Exchange

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IAS 21 Effect of changes in foreign exchange rates

Unsettled transactions

• If a transaction is still unsettled at the reporting date, there will be an outstanding asset or liability on the statement of financial position.

• If the asset/liability is a monetary item: retranslate at closing rate.

• If the asset/liability is a nonmonetary item: leave at historic rate.

• Exchange differences will arise on the retranslation of the monetary items, these are also posted to the statement of profit or loss.