Document ID: chunk:federal_register_of_legislation:F2018L00380:body:0:p7
Version: federal_register_of_legislation:F2018L00380
Segment Type: other
Provision Reference: 
Character Range: 16858–19891

remain within the scope of AASB 121.

    For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.

    As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.

    Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.

    The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss.

    4.             translation of financial reports of foreign operations.

    A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.

         * Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.

         * Translation of financial reports should otherwise follow the requirements in AASB 121.

Basis of preparation

This form is to be completed based on the provisioning practice that is adopted by the institution (i.e. use of the General Reserve for Credit Losses as defined by Prudential Standard APS 220 Credit Quality (APS 220) and specific provision).

Specific instructions
The following specific instructions must be followed when completing the various sections of the return:
   1. Collective provision
Report the movements in the International Financial Reporting Standards (IFRS)[5] collective provisions under this heading.
1.1        Opening balance – Opening balance of provision
1.2        Provisions created - Movement in provisions as a result of business combinations during the year
1.3        Charge for doubtful debts (P & L)
1.3.1 New funding - New increases in provision during the year
1.3.2 Writeback of provision not required – Reversal and decrease of provision to P&L               during the year
1.4        Transfer to specific provision – Increase in provision
1.5        Transfer from specific provision – Decrease in provision
1.6        Bad debts written-off – Decrease in provision and write off of receivable
1.7        Bad debts recovered – Used in isolated circumstances when a doubtful receivable is reinstated
1.8        Foreign currency translation adjustments – Foreign currency movements
1.9        Closing balance – Closing balance of provision
Provisions assessed on a collective basis (i.e. "Collective provisions") with IFRS