About this tool
Under IAS 21, foreign-currency monetary items — cash, receivables, payables and borrowings — are retranslated at the closing (period-end) exchange rate. The resulting exchange difference is recognised in profit or loss. Non-monetary items measured at historical cost are not retranslated.
This generator takes the foreign-currency amount, the rate at initial (or prior) recognition and the closing rate, works out whether you have a gain or a loss given whether the item is an asset or a liability, and produces the revaluation journal entry.
How to use it
- Choose the monetary item type — receivable, cash, payable or borrowing — and enter the foreign-currency amount.
- Enter the opening (or prior) rate and the closing rate in functional currency per unit of foreign currency.
- Read the gain or loss and the journal entry, then download it as a print-ready PDF.
Frequently asked questions
What is FX revaluation under IAS 21?
FX revaluation is the period-end retranslation of foreign-currency monetary items at the closing exchange rate. The change in the functional-currency carrying amount since the last measurement is recognised as a foreign exchange gain or loss in profit or loss.
Which items are revalued at the closing rate?
Only monetary items — cash and bank balances, receivables, payables and borrowings denominated in a foreign currency. Non-monetary items carried at historical cost (such as prepayments or equity investments at cost) are kept at the exchange rate on the transaction date.
Does an FX gain or loss go to profit or loss or to OCI?
For monetary items, exchange differences generally go to profit or loss. Exceptions include the effective portion of a designated cash-flow hedge and exchange differences on a net investment in a foreign operation, which are recognised in other comprehensive income.
How do I know if a rate movement is a gain or a loss?
For a foreign-currency asset, a rise in the foreign currency increases its functional value and produces a gain; a fall produces a loss. For a foreign-currency liability it is the opposite — a rise in the foreign currency increases the amount owed and produces a loss.