F7知识点：Foreign Currency Transactions

IAS 21 The Effects of Changes in Foreign Exchange Rates作为今年F7大纲中新增内容，需要引起考生对于本部分内容的重视。本准则解决了一些在外汇交易中的关键问题和相关会计处理。

(a) Key terms:

Functional currency – the currency of the primary economic environment in which the entity operates.

Presentation currency – the currency in which the financial statements are presented.

The functional currency is the currency in which an entity generates and spends cash. IAS 21 gives guidance, stating that an entity should consider:

the currency that mainly influences sales prices for goods and services

the currency that mainly influences labour, material and other costs in producing goods

An F7 candidate would be expected to know the difference between functional and presentational currency. Often, a company’s presentation currency will match its functional currency. If not, the financial statements will need to be translated at the reporting date from the functional currency into the presentation currency. This is very common within group scenarios, where an overseas subsidiary has a functional currency which differs from the presentation currency of the consolidated financial statements. This issue is not examinable at F7, but is examinable in P2.

(b) Mechanics of translation

Often an entity that trades overseas will buy or sell goods in a currency that is not its functional currency. If this is the case, then translation is required to record the transaction into the entity’s functional currency.

This is done at three stages:

Stage 1 – Initial transactions

When an entity enters into a transaction, this should initially be translated using the historic rate (the spot rate) prevailing at that date.

Stage 2 – Settled transactions

When a transaction is settled (when payment or receipt of cash occurs), this is translated at the historic rate prevailing at the date of settlement. Any exchange gain or loss is then recorded in the statement of profit or loss at that date.

Stage 3 – Unsettled transactions

If a transaction is unsettled at the reporting date (meaning the amount is unpaid or a balance in a different currency is outstanding), then the treatment depends on whether the item is a monetary or non-monetary item.

Monetary items are assets or liabilities to paid in a fixed amount, or a unit of currency held. In the F7 exam, monetary items will be trade receivables, trade payables, cash, overdrafts, and loan notes.

If the item is a monetary item, the balance will be retranslated at the closing rate (the exchange rate at the reporting date), with any gain or loss being recorded in the statement of profit or loss.

Non-monetary items (such as inventory or property held under the cost model) are not retranslated. Instead, they are accounted for at the rate that existed at the date of the initial transaction.

汇率变化的影响在P阶段的学习也会重点涉及，所以需要从F阶段就理解和熟练掌握。