The Effects of Changes in Foreign Exchange Rates

Compiled Accounting Standard AASB 121 The Effects of Changes in Foreign Exchange Rates This compiled Standard applies to annual reporting periods ending on or after 28 February 2007. Early application is permitted. It incorporates amendments made up to and including 15 February 2007. Prepared on 16 April 2007 by the staff of the Australian Accounting Standards Board. AASB 121-compiled 2 COPYRIGHT Obtaining Copies of Accounting Standards The most recently compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB website: www.aasb.com.au. Printed copies of original Standards and amending Standards are available for purchase by contacting: The Customer Service Officer Australian Accounting Standards Board Level 7 600 Bourke Street Melbourne Victoria AUSTRALIA Postal address:

PO Box 204 Collins Street West Victoria 8007 AUSTRALIA Phone: (03) 9617 7637 Fax: (03) 9617 7608 E-mail: publications@aasb.com.au Website: www.aasb.com.au Other Enquiries Phone: (03) 9617 7600 Fax: (03) 9617 7608 E-mail: standard@aasb.com.au COPYRIGHT © 2007 Commonwealth of Australia This compiled AASB Standard contains International Accounting Standards Committee Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non- commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Administration Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007. All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the International Accounting Standards Committee Foundation at www.iasb.org. AASB 121-compiled 3 CONTENTS CONTENTS COMPILATION DETAILS COMPARISON WITH INTERNATIONAL PRONOUNCEMENTS ACCOUNTING STANDARD AASB 121 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES Paragraphs Objective 1 – 2 Application Aus2.1 – Aus2.7 Scope 3 – 7 Definitions 8 Elaboration on the Definitions Functional Currency 9 – 14 Net Investment in a Foreign Operation 15 – 15A Monetary Items 16 Summary of the Approach Required by this Standard 17 – 19 Reporting Foreign Currency Transactions in the Functional Currency Initial Recognition 20 – 22 Reporting at Subsequent Reporting Dates 23 – 26 Recognition of Exchange Differences 27 – 34 Change in Functional Currency 35 – 37 Use of a Presentation Currency other than the Functional Currency Translation to the Presentation Currency 38 – 43 Translation of a Foreign Operation 44 – 47 Disposal of a Foreign Operation 48 – 49 Tax Effects of all Exchange Differences 50 Disclosure 51 – 57 BASIS FOR CONCLUSIONS ON IAS 21 (available on the AASB website) AASB 121-compiled 4 CONTENTS Australian Accounting Standard AASB 121 The Effect of Changes in Foreign Exchange Rates is set out in paragraphs 1 – 57. All the paragraphs have equal authority. Terms defined in this Standard are in italics the first time they appear in the Standard. AASB 121 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation and Application of Standards, which identifies the Australian Accounting Interpretations. In the absence...

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