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Thursday 28 May 2020

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Draft Interpretation October 2015

Foreign Currency Transactions and Advance Consideration: Draft Interpretation and Comment Letters (DI/2015/2)

On 21 October 2015, the IFRS Interpretations Committee (‘Interpretations Committee’) published for public comment a proposed Interpretation of Standards, designed to address diversity in how the Standard is applied in practice. This proposed Interpretation addresses which exchange rate should be used to report foreign currency transactions when payment is made or received in advance.  

Interpretations form part of the authoritative International Financial Reporting Standards (IFRS) requirements. They are developed by the Interpretations Committee, which works with the International Accounting Standards Board (IASB) to provide guidance on specific implementation issues, helping those using IFRS and supporting consistency in application.  

IAS 21 The Effects of Changes in Foreign Exchange Rates sets out requirements about which exchange rate to use when recording a foreign currency transaction on initial recognition in the entity’s functional currency. However, the Interpretations Committee observed diversity in practice in circumstances in which consideration was received or paid in advance of the recognition of the related asset, expense or income.  Consequently, the Interpretations Committee proposes an Interpretation to provide guidance in these specific circumstances.   

Comment letters

The Interpretations Committee sought comments on this proposed Interpretation by 19 January 2016.

View the Comment Letters.


Due process documents
Draft IFRIC Interpretation: Foreign Currency Transactions and Advance Consideration [PDF]
IFRIC 解釈指針案: 外貨建取引と前渡・前受対価 [PDF] (Japanese)
Proyecto Interpretación: Transacciones en Moneda Extranjera y Contraprestaciones anticipadas [PDF] (Spanish)
Recepción de comentarios hasta el 19 de enero de 2016
Projet d’interprétation: Transactions en monnaie étrangère et contrepartie anticipée [PDF] (French)
Date limite de réception des commentaires : le 19 janvier 2016



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Jawaid Dossani
Senior Technical Manager