Foreign exchange effects 36 / 41

Understand these from a single and group company viewpoint

Group Companies

e.g. Foreign subsidiary

  1. Retranslate SFP at year end rate

  2. Retranslate I/S at average or actual rate

  3. Difference goes to reserves NOT I/S

Single company

e.g. Dealing with foreign transactions

  1. Difference between buying and paying rate

  2. Difference between selling and receiving rate

  3. Retranslate all foreign monetary balances (cash, loans, debtors etc) at year end rate

  4. Difference goes to I/S

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