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PSAB - Section PS 2601, Foreign Currency Translation [Completed]

Effective date:

Fiscal years beginning on or after April 1, 2012 for government organizations and for fiscal years beginning on or after April 1, 2016 for governments.

Transitional provisions:

Effective for fiscal years beginning on or after April 1, 2012 for government organizations and for fiscal years beginning on or after April 1, 2016 for governments. Early adoption permitted.

Last updated:

December 2013

Overview

The main features of the new standard PS 2601 include the following:
a. a statement of remeasurement gains and losses is introduced;
b. the statement of remeasurement gains and losses reports:
i) exchange gains and losses associated with monetary assets and monetary liabilities denominated in a foreign currency that have yet to be settled;
ii) amounts reclassified to the statement of operations upon derecognition or settlement; and
iii other comprehensive income reported when a government includes the results of government business enterprises and government business partnerships in the government’s summary financial statements.
The other major changes from Section PS 2600 include:
a. the elimination of deferral and amortization of unrealized gains and losses arising from foreign currency translation before settlement; and
b. the withdrawal of hedge accounting as it is unnecessary under the new treatment of unrealized gains and losses.

Other developments

December 2013

In December 2013, the PSAB completed its review of the application of Section PS 2601, Foreign Currency Translation, and Section PS 3450, Financial Instruments, to governments, and confirmed that the principles are fundamentally sound. In addition, in response to a request for additional time by governments to implement these standards, the PSAB approved an amendment to the transitional provisions to extend the effective date by one year to April 1, 2016 from April 1, 2015.

June 2013

In June 2013, the PSAB approved amendments to the transitional provisions in this Section and agreed that exposure of the changes is not required given the change is simply clarification of an implementation intent.

July 2011

In July 2011, PSAB issued a Basis of Conclusions document in respect of its amendments to PS 2601.

March 2011

In March 2011, PSAB approved two new standards, Section PS 3450, Financial Instruments, and two revised standards, Section PS 1201, Financial Statement Presentation, and Section PS 2601, Foreign Currency Translation (to replace the existing Section PS 1200, Financial Statement Presentation, and Section 2600, Foreign Currency Translation, respectively).

November 2010

In November 2010, PSAB amended its 2009 ED to reflect changes arising from the deliberation of responses. The amendments conform the 2009 ED to the financial statement presentation model now in the 2010 ED, Financial Instruments and Foreign Currency Translation: Financial Statement Presentation, specifically the introduction of a new statement of remeasurement gains and losses to report unrealized gains and losses on financial instruments and foreign exchange.

 

Correction list for hyphenation

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