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    Mfrs 121

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    alanz123
    This document summarizes the key aspects of MFRS121, which establishes accounting treatment for foreign exchange gains and losses. It defines foreign currency, foreign operation, and functional currency. Exchange differences arising on monetary items are recognized in profit or loss. Gains/losses on non-monetary items are recognized in OCI or profit/loss depending on where the original gain/loss was recognized. Disclosures include exchange differences recognized in profit/loss and OCI, and reasons for changes in functional currency.

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    Mfrs 121

    Uploaded by

    alanz123
    565 views2 pages
    This document summarizes the key aspects of MFRS121, which establishes accounting treatment for foreign exchange gains and losses. It defines foreign currency, foreign operation, and functional currency. Exchange differences arising on monetary items are recognized in profit or loss. Gains/losses on non-monetary items are recognized in OCI or profit/loss depending on where the original gain/loss was recognized. Disclosures include exchange differences recognized in profit/loss and OCI, and reasons for changes in functional currency.

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    This document summarizes the key aspects of MFRS121, which establishes accounting treatment for foreign exchange gains and losses. It defines foreign currency, foreign operation, and functional currency. Exchange differences arising on monetary items are recognized in profit or loss. Gains/losses on non-monetary items are recognized in OCI or profit/loss depending on where the original gain/loss was recognized. Disclosures include exchange differences recognized in profit/loss and OCI, and reasons for changes in functional currency.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    565 views2 pages

    Mfrs 121

    Uploaded by

    alanz123
    This document summarizes the key aspects of MFRS121, which establishes accounting treatment for foreign exchange gains and losses. It defines foreign currency, foreign operation, and functional currency. Exchange differences arising on monetary items are recognized in profit or loss. Gains/losses on non-monetary items are recognized in OCI or profit/loss depending on where the original gain/loss was recognized. Disclosures include exchange differences recognized in profit/loss and OCI, and reasons for changes in functional currency.

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    MFRS121 - The Effects of Changes in Foreign Exchange Rates

    In November 2011 the Malaysian Accounting Standards Board (MASB) issued MFRS
    121 The Effects of Changes in Foreign Exchange Rates. The Standard is applicable for annual
    periods beginning on or after 1 January 2012. MFRS 121 is equivalent to IAS 21 The Effects of
    Changes in Foreign Exchange Rates as issued and amended by the International Accounting
    Standards Board.

    Definitions

    The following terms are used in this standard with the meanings specified:

    Foreign currency is a currency other than the functional currency of the entity.

    Foreign operation is an entity that is a subsidiary, associate, joint arrangement or barnch of a


    reporting entity, the activities of which are based or conducted in a country or currency other
    than those of the reporting entity.

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

    Recognition of exchange differences

    Exchange differences arising on the settlement of monetary items or on translating


    monetary items at rates different from those at which they were translated on initial recognition
    during the period or in previous financial statement shall be recognized in profit or loss in the
    period in which they arise, except as described in paragraph 32.

    When a gain or loss on non-monetary item is recognized in other comprehensive income,


    any exchange component of that gain or loss shall be recognized in other comprehensive income.
    Conversely, when a gain or loss on a non-monetary item is recognized in profit or loss, any
    exchange component of that gain or loss shall be recognized in profit or loss.
    Disclosure

    An entity shall disclose:

    (a) The amount of exchange differences recognized in profit or loss except for those arising
    on financial instruments measured at fair value through profit or loss in accordance with
    MFRS 139; and
    (b) Net exchange difference recognized in other comprehensive income and accumulated in a
    separate component of equity, and a reconciliation of the amount of such exchange
    different at the beginning and end of the period.

    When the presentation currency is different from the functional currency, that fact shall be
    stated, together with disclosure of the functional currency and the reason for using a different
    presentation currency.

    When there is a change in the functional currency of either the reporting entity or a
    significant foreign operation, that fact and the reason for the change in functional currency shall
    be disclosed.

    When an entity presents its financial statement in currency that is different from its functional
    currency, it shall describe the financial statement as complying with MFRSs only if they comply
    with all the requirements of MFRSs including the translation method set out in paragraphs 39
    and 42.

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