IAS 21Chapter 10Lesson 1
Translating into a presentation currency: the rates to use
Step 1 of 6Learning objectives
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The entity chooses its presentation currency; if it differs from the functional currency, assets and liabilities are translated at the closing rate, income and expenses at transaction rates (or an approximating average rate).
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Learning objectives
- Explain that the presentation currency is a choice and what happens if it differs from the functional currency.
- Translate assets, liabilities, income and expenses with the right rates.
- Use an average rate as an approximation, with care.