Currency of material  
This material was last updated when this standard was released in July 2004.  
 
A list of the omnibus amending standards issued up until July 2007 that have affected this standard since this date is included in the following table. The table also contains the date when the relevant changes become operative. 
 
Omnibus amending standards are available on the AASB website as are compiled standards incorporating omnibus amendments as soon as they are completed by the AASB. 
 
Details of the changes made by each omnibus are summarised in ANT and Charter’s “The Panel” as they are released. For a quick overview of the new material applying at 30 June 2007 click here.  

• Determine the reporting entity’s functional currency – the currency of the primary economic environment in which the entity operates – and use that currency to measure results and financial position; 
   
  
• Foreign currency transactions – record the financial effects into the functional currency: 
  i) date of transaction - record the transaction using the transaction-date exchange rate for initial recognition and measurement; 
  ii) subsequent reporting dates - outstanding monetary items must be retranslated (ie. restated) using the closing rate (end of period rate); 
  iii) subsequent reporting dates - non-monetary items measured at fair value in foreign currency must be translated using the revaluation date exchange rate; 
  iv) settlement dates - the to-be-settled monetary items must be restated and the receipt/payment must be recorded using the settlement date exchange rate; 
  v) exchange differences arising on restatement of monetary items at reporting date and settlement date at exchange rates different than when initially recognised are recognised as income or expense in the period of restatement; and 
  vi) exchange differences on revalued non-monetary items are recognised consistent with the revaluation of those items, eg. directly against the revaluation reserve. 
   
  
• Foreign operations - translate balances into functional currency 
  i) revenues and expenses using the transaction date rates or appropriate average rates; 
  ii) monetary items in the balance sheet using the closing rate; 
  iii) non-monetary items carried at historical cost use transaction-date exchange rates; 
  iv) non-monetary items carried at fair value use valuation-date exchange rates; and 
  v) exchange differences treated as per accounting for foreign currency transactions. 
   
  
• Determine the reporting entity’s presentation currency; 
  · Translating balances from the reporting entity’s functional currency into its presentation currency: 
  i) assets and liabilities for each balance sheet presented (including comparatives) are translated at the closing rate at the date of that balance sheet; 
  ii) income and expenses for each income statement (including comparatives) are translated at exchange rates at the dates of the transactions or appropriate average rates; and 
  iii) exchange differences arising from translation to presentation currency must be recognised as a separate component of equity. 
   
  
• Exchange differences arising on monetary items that form part of the reporting entity’s net investment in a foreign operation are recognised in the consolidated financial report as a separate component of equity but recognised in profit or loss on disposal of the net investment.