Document ID: chunk:federal_register_of_legislation:F2025C00208:body:0:p3
Version: federal_register_of_legislation:F2025C00208
Segment Type: other
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Character Range: 5748–8708

may present its financial statements in a foreign currency. The objective of this Standard is to prescribe how to include foreign currency transactions and foreign operations in the financial statements of an entity and how to translate financial statements into a presentation currency.
AusCF1 AusCF entities are:
               (a) not-for-profit entities; and
               (b) for-profit entities that are not applying the Conceptual Framework for Financial Reporting (as identified in AASB 1048 Interpretation of Standards).
For AusCF entities, the term 'reporting entity' is defined in AASB 1057 Application of Australian Accounting Standards and Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity also applies.  For-profit entities applying the Conceptual Framework for Financial Reporting are set out in paragraph Aus1.1 of the Conceptual Framework.
2 The principal issues are which exchange rate(s) to use and how to report the effects of changes in exchange rates in the financial statements.

Scope
3 This Standard shall be applied:[1]
(a) in accounting for transactions and balances in foreign currencies, except for those derivative transactions and balances that are within the scope of AASB 9 Financial Instruments;
(b) in translating the results and financial position of foreign operations that are included in the financial statements of the entity by consolidation or the equity method; and
(c) in translating an entity's results and financial position into a presentation currency.
4 AASB 9 applies to many foreign currency derivatives and, accordingly, these are excluded from the scope of this Standard. However, those foreign currency derivatives that are not within the scope of AASB 9 (eg some foreign currency derivatives that are embedded in other contracts) are within the scope of this Standard. In addition, this Standard applies when an entity translates amounts relating to derivatives from its functional currency to its presentation currency.
5 This Standard does not apply to hedge accounting for foreign currency items, including the hedging of a net investment in a foreign operation. AASB 9 applies to hedge accounting.
6 This Standard applies to the presentation of an entity's financial statements in a foreign currency and sets out requirements for the resulting financial statements to be described as complying with Australian Accounting Standards. For translations of financial information into a foreign currency that do not meet these requirements, this Standard specifies information to be disclosed.
7 This Standard does not apply to the presentation in a statement of cash flows of the cash flows arising from transactions in a foreign currency, or to the translation of cash flows of a foreign operation (see AASB 107 Statement of Cash Flows).

Definitions
8 The following terms are used in this Standard with the meanings specified:
Closing rate is the spot exchange rate at the end of