Assets and liabilities at the closing rate

Learning objectives

• Translate assets and liabilities at the closing rate when translating into the presentation currency.L1, L2, L3
• Calculate, from the case data, the translated amount or the exchange difference relating to the concept “Assets and liabilities at closing rate (39(a))”.L1, L2, L3

Normative references

• IAS 21 §39Translation into a different presentation currency. Current requirement (EU text in force, before the November 2025 amendment): applies to any entity whose functional currency is not the currency of a hyperinflationary economy: (a) assets and liabilities for each statement of financial position presented (including comparatives) at the closing rate at the date of that statement; (b) income and expenses for each statement presenting profit or loss and other comprehensive income (including comparatives) at the exchange rates at the dates of the transactions; (c) the resulting exchange differences in other comprehensive income. Future requirement (November 2025 amendment, para. 60O; annual periods beginning on or after 1 January 2027, earlier application permitted): the introductory sentence covers cases where the functional and presentation currencies differ and are both currencies of non-hyperinflationary economies, translation into a hyperinflationary presentation currency being dealt with by added paragraphs.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• To translate the financial statements of a foreign subsidiary into the presentation currency (non-hyperinflationary economy), which rate applies to the assets and liabilities of the statement of financial position?L1
• The British subsidiary of Hadrel reports at the closing date assets of {assets} and liabilities of {liabilities}. The closing rate is 1.18 euros per 1 pound; the group's presentation currency is the euro. Calculate the translated assets and liabilities.L2
• The Ormand group presents year N and the comparative N-1 in euros. Its Swiss subsidiary has net assets of 900,000 Swiss francs at the closing date N (closing rate 1.05 euros) and 800,000 francs at the closing date N-1 (closing rate 1.00 euro). How does it translate the comparative N-1?L3