Foreign currency
(I) Foreign currency transactions
Transactions in foreign currencies are translated into euros at the spot exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into euros at the exchange rate prevailing at that date. Exchange differences arising on translation are recognised in the profit and loss account.
(II) Operations outside the eurozone
The assets and liabilities of operations outside the eurozone, including goodwill and fair value adjustments arising on consolidation, are translated into euros at the exchange rates prevailing at the balance sheet date. The income and expenses of such operations are translated into euros at average exchange rates. Exchange differences arising on translation are recognised as a separate component of shareholders’ equity. They are released to the profit and loss account upon disposal.
(III) Net investments in operations outside the eurozone
Exchange differences arising from the translation of the net investment in operations outside the eurozone and from related hedges are recognised in the foreign currency translation reserve. They are released to the profit and loss account upon disposal.
Source: Annual Report 2008, Chapter Financial Statements, page 155 (PDF, 179 kB)
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