EFRAG's Comment Letter and Feedback Statement on the IASB's Draft Interpretation DI/2015/2 Foreign Currency Transactions and Advance Consideration
On 21 October 2015, the IASB issued the Draft Interpretation DI/2015/2
Foreign Currency Transactions and Advance Consideration (the ‘Draft
Interpretation’).
The purpose of the Draft Interpretation is to propose the exchange rate to
use when reporting transactions with a prepayment asset or a deferred income
liability that are denominated in a foreign currency in accordance with IAS 21
The Effects of Changes in Foreign Currency Rates.
In its comment letter, EFRAG welcomes the guidance proposed in the Draft
Interpretation, as it will clarify the accounting for foreign currency
transactions in which consideration was received or paid in advance of the
recognition of the related asset, expense or income. EFRAG also agrees with the
proposed consensus and believes it is consistent with the underlying principles
in IAS 21 The Effects of Changes in Foreign Exchange Rates.
The feedback statement describes the main comments received by EFRAG in
response to the draft comment letter and how these comments were considered by
EFRAG in finalising its comment letter to the IASB.