IFRS Interpretations Committee issues Draft Interpretation on Foreign Currency Transactions and Advance Consideration
18 November 2015
This edition outlines the proposals set out in the recent draft IFRIC Interpretation DI/2015/2 Foreign Currency Transactions and Advance Consideration (the “draft Interpretation”) which was issued by the IFRS Interpretations Committee in October 2015 for public comment.
The proposals would provide guidance on how an entity should determine the date of a transaction, and therefore, the spot exchange rate to be used when reporting foreign currency transactions in situations where payment is made or received in advance.
The new guidance would be applied not only to revenue transactions, but to the initial recognition of other foreign currency transactions where payment is made or received in advance.
Entities would have the option of applying the proposals either retrospectively or prospectively on initial application.
The comment period on the proposals ends on 19 January 2016.