IFRIC 22 on foreign currency transactions up for review

The European Financial Reporting Advisory Group (EFRAG) is consulting on its assessment of IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration (IFRIC 22) against the endorsement criteria in the IAS regulation

The review covers the technical criteria and whether IFRIC 22 is conducive to the European public good.

The objective of IFRIC 22 is to clarify how the date of the transaction should be assessed for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability arising from advance consideration in a foreign currency.

IFRIC 22 becomes effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.

EFRAG's overall preliminary assessment is that IFRIC 22 satisfies the criteria for endorsement for use in the EU and therefore recommends its endorsement.

EFRAG is seeking comments on all aspects of its analyses supporting its preliminary conclusions.

The deadline for feedback is 17 March.

The draft endorsement advice is here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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