IFRIC 22

Financial reporting - foreign exchange.

IFRIC 22 is an Interpretation of IAS 21 (The Effects of Changes in Foreign Exchange Rates).

The Interpretation - Foreign Currency Transactions and Advance Consideration - deals with consideration paid or received in advance.

It covers foreign currency transactions when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income.

Under IFRIC 22:

• The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.

• If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.

Effective from January 2018.

See also

• Foreign exchange
• IAS 21
• IFRIC
• International Financial Reporting Standards