IFRIC 22 — Foreign Currency Transactions and Advance Consideration
Effective date: |
Effective for annual reporting periods beginning on or after January 1, 2018. Earlier application is permitted. |
Published by the IASB: |
December 8, 2016 |
Included in Part I of CPA Canada Handbook: |
March 2017 |
Overview
Issue and scope of the interpretation
The interpretation addresses foreign currency transactions or parts of transactions where: (i) there is consideration that is denominated or priced in a foreign currency; (ii) the entity recognizes a prepayment asset or a deferred income liability in respect of that consideration, in advance of the recognition of the related asset, expense or income; and (iii) the prepayment asset or deferred income liability is non-monetary.
Consensus
The Interpretations Committee came to the following conclusion:
- The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.
- If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.
History of IFRIC 22
The following table shows the history of this standard subsequent to the adoption of IFRS in Canada.
Date1 |
Development |
Comments |
Included in Part I of the CPA Canada Handbook2 |
December 8, 2016 |
IFRIC 22, Foreign Currency Transactions and Advance Consideration, issued |
This new interpretation clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency. IFRIC 22 is effective for annual reporting periods beginning on or after January 1, 2018. Earlier application is permitted. |
March 2017 |
Notes
- For further details of relevant developments prior to this, please refer to our Deloitte Global section.
- Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.
The above summary does not include details of consequential amendments made as the result of other projects.
Related Standards
Amendments under consideration
- None