Foreign exchange rates in consolidated financial statements under IFRS

Abstract

Companies which carry out foreign operations can perform transactions in foreign currency. In addition, companies can provide financial statements data in a foreign currency. IAS 21 - The Effects of Changes in Foreign Exchange Rates establishes a procedure for performing transactions in foreign currencies and foreign operations for financial reporting, as well as translation of financial statements into the presentation currency. The task of the standard is to disclose information about the exchange rate usage and to reflecting the impact of changes in exchange rates in its financial statements. For reporting under IFRS such currency should be selected, which is actively used and has significant influence on it. This paper summarizes just some aspects of the influence of the exchange rates change effects on the consolidated financial statements according to IFRS.