IAS 21 — The Effects of Changes in Foreign Exchange Rates
Modules of the standard
- Concepts69 publishedNormative and pedagogical mapping.
- Questions104 publishedTrue/false, quizzes, calculations, entries, mini-cases, judgment.
- Practical cases5 publishedProgressive cases, from beginner to expert.
- Workpapers4 publishedWorking papers with calculations and entries.
- Professional file1 publishedSimulation of a full engagement.
- Exams2 publishedSealed, versioned final exams.
- Explanations (lessons)15 publishedLesson explanations, chapter by chapter.
Practical cases
- Purchase in dollars: functional currency, recognition at the spot rate, remeasurement of the payable at closing and settlementL1Beginner
- Machine, revalued land, average rate and advance in dollars: non-monetary items and the transaction dateL2Intermediate
- Translation of a UK subsidiary: closing rate, average rate, translation reserve and goodwillL3Advanced
- Loan to a US subsidiary: net investment, intragroup balance, separate or consolidated treatment and taxL3Advanced
- Disposal of a foreign operation: loss of control, partial disposal, non-controlling interests and differences accumulated before hyperinflationL4Expert
- File of a group with foreign operations: functional currency, loan and net investment, non-exchangeable currency, translation, hyperinflation and disposals (IAS 21)L4Expert
Workpapers
- Functional currency file: indicators, documented judgement, change and disclosures
- Foreign currency items file: initial recognition, closing, exchange differences, advances and estimated rate
- Foreign operation translation file: rates, translation reserve, goodwill, tax and intragroup balances
- Net investment and disposal of a foreign operation file: differences, reclassification, partial disposal and non-controlling interests
Concepts by topic
Mapping texts (concept labels, objectives, paragraph summaries) are available in French only for now.
Purpose, scope and exclusions
- Purpose of the standardImportant1 question
- What the standard coversCore2 questions
- Foreign currency derivatives excludedImportant1 question
- Hedge accounting excludedImportant2 questions
- Foreign currency cash flows (IAS 7)Important1 question
Basic definitions
- Foreign currency and foreign currency transactionCore2 questions
- Spot rateCore2 questions
- Closing rateCore2 questions
- Exchange differenceCore2 questions
- Monetary and non-monetary itemsCore2 questions
- Foreign operationCore2 questions
Determining the functional currency
- Primary indicatorsCore2 questions
- Secondary factorsImportant1 question
- Mixed indicators and judgementAdvanced1 question
- Factors specific to a foreign operationAdvanced1 question
- Overall determinationCore1 question
Initial recognition of foreign currency transactions
- Initial recognitionCore3 questions
- Spot rate of the transactionCore3 questions
- Transaction dateCore2 questions
- Average rate as an approximationImportant1 question
Measurement at reporting dates
- Monetary items at the closing rateCore3 questions
- Non-monetary items at historical costCore3 questions
- Non-monetary items at fair valueCore3 questions
- Comparison of two amountsAdvanced1 question
Recognition of exchange differences
- Differences on monetary items in profit or lossCore3 questions
- No difference for a non-monetary item at costImportant1 question
- Exchange component of a revaluationCore3 questions
Net investment in a foreign operation
- Definition of the net investmentAdvanced1 question
- Exchange differences on the net investmentAdvanced1 question
- Separate and consolidated statementsAdvanced1 question
Change of functional currency
- Conditions for the changeImportant1 question
- Prospective applicationImportant1 question
- Translation at the date of the changeAdvanced1 question
Choice of presentation currency
- The presentation currency is a choiceCore2 questions
Translation into a presentation currency
- Assets and liabilities at the closing rateCore3 questions
- Income and expenses at transaction ratesCore3 questions
- Average rate for translationCore3 questions
- Translation difference and reserveCore3 questions
- Share of non-controlling interestsAdvanced1 question
Hyperinflationary economies
- Translation under hyperinflationAdvanced1 question
- Link with IAS 29Advanced1 question
- Differences accumulated before hyperinflationSpecialisedNo question
Foreign operations in consolidation
- Goodwill and fair value adjustmentsCore3 questions
- Intragroup monetary balancesAdvanced1 question
- Different reporting datesAdvanced1 question
Disposal of a foreign operation
- Reclassification on disposalCore3 questions
- Cases treated as a disposalAdvancedNo question
- Non-controlling interests on disposalAdvanced1 question
- Proportionate partial disposalAdvanced1 question
- Definition of a partial disposalSpecialisedNo question
- Write-down and disposalAdvanced1 question
Tax effects
- Tax effects of differencesAdvancedNo question
Disclosures
- Disclosure of exchange differencesImportant1 question
- Disclosure about currenciesImportant1 question
- Disclosure of a change of functional currencyImportant1 question
- Convenience translationImportantNo question
Exchangeability of a currency
- Definition of exchangeabilityImportant1 question
- Estimating the spot rateSpecialised1 question
- Disclosures when not exchangeableAdvanced2 questions
- Application date and transitionImportant1 question
Advance consideration in foreign currency (IFRIC 22)
- Transaction date of an advanceCore3 questions
- Several payments in advanceImportant1 question
- Scope of IFRIC 22Important1 question
- Application date of IFRIC 22Important1 question
Boundaries with other standards
- Boundary with IFRS 9Important1 question
- Boundary with IAS 12Important1 question
- Link with IFRS 10Important1 question
- Link with IAS 29Important1 question
- Link with IFRS 3Important1 question