• IAS 21, The Effects of Changes in Foreign Exchange Rates

History

• SIC D30 Issued July 2001.
• Final SIC 30 was approved by the IASB in December 2001. The text below does not reflect the final approved version.

Draft Interpretations are proposals that are not yet final.

SIC D30 addresses how an enterprise should translate its financial statements from a currency used for measuring items in its financial statements (measurement currency) to another currency for presentation purposes (presentation currency). SIC-19, Reporting Currency - Measurement and Presentation of Financial Statements Under IAS 21 and IAS 29, requires that the translation method used not lead to reporting in a manner that is inconsistent with the measurement of items in the financial statements. The requirements of SIC-19.9 should be applied as follows:

• assets and liabilities should be translated at the closing rate at the date of each balance sheet presented, except when an enterprise's measurement currency is the currency of a hyperinflationary economy, in which case assets and liabilities should be translated at the closing rate existing at the date of the most recent balance sheet presented;
• income and expense items should be translated at the exchange rates existing at the dates of the transactions or a rate that approximates the actual exchange rates, except when an enterprise's measurement currency is the currency of a hyperinflationary economy, in which case income and expense items for all periods presented should be translated at the closing rate existing at the end of the most recent period presented; and
• all resulting exchange differences should be reported directly in equity.

SIC D30 also addresses "convenience translations": What information should be disclosed when additional information not required by International Accounting Standards is displayed in a currency, other than the currency used in presenting its financial statements, as a convenience to certain users. The SIC agreed that in this circumstance an enterprise should:

• clearly identify the information as supplementary information to distinguish it from the information required by International Accounting Standards; and
• disclose the method of translation used as a basis for presenting the information.

Issued for public comment on 9 July 2001. Comment deadline 10 September.

Click for IASC Press Release on SIC D28 to D32 (PDF 44k)