FRS 23 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:

• icaew.com/newukgaap

Synopsis

FRS 23 is the equivalent of IAS 21. It prescribes the accounting for:

• Transactions in foreign currencies
• Translating the accounts of foreign operations prior to consolidation

Individual transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date of the transaction. At the date of settlement, cash transferred is recorded at the rate prevailing on the settlement date. Any exchange difference arising is recognised in profit or loss.

The balance sheet of a foreign operation is translated using the closing rate, being the exchange rate at the reporting date. The income statement is translated using the exchange rates at the dates of the transactions. Where this is impracticable, an average rate for the year may be used provided that exchange rates do not fluctuate significantly. Exchange differences arising are reported in the statement of total recognised gains and losses.

• Read FRC Summary on FRS 23

Last updated 21 June 2015