Exchange differences from non-monetary items

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

Foreign operations – Ind AS 21

Exchange differences on monetary items

Difference between monetary and non-monetary items

Treatment of exchange differences – Ind AS 21

Presentation Currency – Ind AS 21

Objectives, Scope & Benefits Ind AS 21

Functional Currency – Ind AS 21

Exchange differences from the presentation currency

Miscellaneous items – Ind AS 21

Transaction are covered by Ind AS 21

Recognition and measurement – Ind AS 21

Transaction are outside the scope of Ind AS 21

Financial statements presented in any currency

Difference between FX translation and FX revaluation

Carrying amount of a monetary item

Carrying amount of a non-monetary item