IFRIC 22 Foreign Currency Transactions and Advance Consideration
Published December 2016. Effective 1 January 2018.
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IFRIC 22 provides guidance applicable when an entity receives or pays consideration in advance in a foreign currency. In this case a non-monetary asset or liability (a prepayment or deferred income) is recognised. This is subsequently derecognised when the related asset, expense or income is recognised. The exchange rate applied to recognise the advance consideration and to determine the initial measurement of the related asset, expense or income (or part of it) is the spot rate on the date on which the advance consideration is received or paid. If there is more than one advance payment or receipt, a date of transaction must be determined for each payment or receipt.
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