CERTYNEX IFRS ACADEMY

Brivon estimated a spot exchange rate because the currency of one of its foreign operations is not exchangeable. When drafting the note, its controller considers that the list of disclosures in para. 57A is self-sufficient and that no other IAS 21 requirement specifies how to apply it. What should he be told?

Para. 57B refers to paras. A18 to A20, which specify how to apply para. 57A, including for a foreign operation.

He is right: the objective of para. 57A is met as soon as the entity discloses the spot rate used and the nature of the lack of exchangeability.

The application guidance is in IFRS 7, as a lack of exchangeability is treated as a liquidity risk of financial instruments.

Nothing is required for a foreign operation: only the entity's own transactions are covered.