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AASB 121 - The Effects of Changes in Foreign Exchange Rates

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Text of the Standard 
Summary 
AIFRS compared to IFRS and old AGAAP 
Interpretations and guidance 
Questions and answers 
Articles 

 
IFRIC Rejections and Guidance 
 
 
1. April 2003 - Exchange Rate for Re-measuring Foreign Currency Transactions and Translation of Foreign Operations under IAS 21 
 
Issue: 
 
The issue is which exchange rate an entity should use for remeasuring foreign currency transactions and translation of foreign operations if more than one exchange rate is available. The IFRIC noted that paragraph 24 of IAS 21 "The Effects of Changes in Foreign Exchange Rates" (in the Exposure Draft of proposed "Improvements to International Accounting Standards") states that “When several exchange rates are available, the rate to be used is that at which the future cash flows represented by the transaction or balance could have been settled if those cash flows had occurred at the measurement date.”  
 
IFRIC Decision: 
 
The IFRIC agreed that the guidance in the improved IAS 21 is satisfactory and decided not to take the issue on to its agenda.  
Top 
 
 
 
Australian Accounting Interpretations 
 
Interpretation 107 "Introduction to the Euro" 
 
This Interpretation prescribed how to apply AASB 121 “The Effects of Changes in Foreign Exchange Rates” when the Euro was first introduced.