Exchange differences from non-monetary items

How are the exchange differences arising from non-monetary items dealt with?

Non-monetary items

• When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is also recognised in profit or loss.
• When a gain or loss on a non-monetary item is recognised directly in other comprehensive income, any exchange component of that gain or loss is recognised directly in other comprehensive income (for example, gain or loss on equity securities measured at FVOCI).

Other comprehensive income

• Other Ind ASs require some gains and losses to be recognised in other comprehensive income.
• For example, Ind AS 16 requires some gains and losses arising on a revaluation of property, plant and equipment to be recognised in other comprehensive income.

When such an asset is measured in a foreign currency, the revalued amount to be translated using the rate at the date the value is determined, resulting in an exchange difference that is also recognised in other comprehensive income.

Ind AS Accounting Standards