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3. SCOPE FOREIGN CURRENCY TRANSACTIONS AND BALANCES EXCEPT DERIVATIVES WITHIN THE SCOPE OF IAS 39 & IFRS9 TRANSLATING THE RESULTS AND FINANCIAL POSITION OF FOREIGN OPERATIONS BY CONSOLIDATION, PROPTIONATE CONSOLIDATION OR EQUITY METHOD TRANSLATING AN ENTITY’S RESULTS AND FINANCIAL POSIION INTO A PRESENTATION CURRENCY HOWEVER THOSE FOREIGN CURRENCY DERIVATIVES OUTSIDE IAS 39 & IFRS 9 ARE WITHIN THIS IAS. TRANSLATIONS

4.  DEFINITIONS CLOSING RATE-SPOT RATE AT THE END OF THE REPORTING PERIOD EXCHANGE DIFFERENCE-DIFFERENT EXCHANGE RATE EXCHANGE RATE-RATIO BETWEEN TWO CURRENCIES FAIR VALUE FOREIGN CURRENCY-OTHER THAN FUNCTIONAL CURRENCY OF THE ENTITY FOREIGN OPERATIONS-IS AN ENTITY THAT IS 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

5.  DEFINITIONS-CONTINUED FUNCTIONAL CURRENCY IS THE CURRENCY OF THE PRIMARY ECONOMIC ENVIRONMENT IN WHICH THE ENTITY OPERATES A GROUP IS A PARENT AND ITS SUBSIDIARY MONETARY ITEMS-RIGHT TO RECEIVE OR OBLIGATION TO DELIVER A FIXED OR DETERMINABLE NUMBER OF UNITS OF CURRENCY. NON MONETARY-ABSENCE OF RIGHT(NOT FOUND IN DEFINITIONS) NET INVESTMENTS IN A FOREIGN OPERATIONS-REPORTING ENTITY’S INTEREST IN THE NET ASSETS OF THAT OPERATIONS PRESENTATION CURRENCY-IN WHICH FINANCIAL STATEMENTS ARE PRESENTED SPOT EXCHANGE RATE-RATE FOR IMMEDIATE DELIVERY.

6. 5 HOW THIS STANDARD IS APPLIED? DETERMINE THE FUNCTIONAL CURRENCY ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS TRANSLATION OF FOREIGN OPERATIONS TRANSLATION FROM FUNCTIONAL CURRENCY TO PRESENTATION CURRENCY

7. PRIMARY INDICATORS CONCEPT OF ECONOMIC ENVIRONMENT-GENERATION AND EXPENSES OF CASH. DOES IT INFLUENCE THE SALE PRICE?-DENOMINATION AND SETTLEMENT. DOES IT INFLUENCE THE COST? (LABOR, MATERIAL AND OTHER COSTS) ADDITIONAL INDICATORS IN WHAT CURRENCY THE FINANCING ACTIVITIES TAKE PLACE? IN WHAT CURRENCY RECEIPTS FROM OPEATING ACTIVITIES ARE USUALLY RETAINED. CAN THE FUNCTIONAL CURRENCY CHANGED?-YES IF THERE IS A CHANGE IN THOSE UNDERLYING TRANSACTIONS, EVENTS AND CONDITIONS. DETERMINATION OF FUNCTIONAL CURRENCY OF THE ENTITY- KEY CONSIDERATIONS

8. IS FOREIGN OPERATIONS AN EXTENSION OF THE REPORTING ENTITY RATHER THAN WITH SIGNIFICANT AUTONOMY? WHETHER TRANSACTIONS WITH THE REPORITNG ENTITY ARE HIGH OR LOW PROPORIION OF THE FOREIGN ENTITY’S ACTIVITIES? WHETHER THE CASH FLOWS FROM THE FOREIGN ENTITY’S WOULD DIRECTLY AFFECT THE CASH FLOWS OF THE REPORTING ENTITY? WHETHER CASH FLOWS OF FOREIGN ENTITY IS SUFFICIENT TO SERVICE ITS EXISTING DEBT OBLIGATIONS? IS IT CLEAR OR MIXED? USE JUDGEMENT, WHICH FAITHFULLY REFLECTS THE ECONOMIC EFFECTS OF THE UNDERLYING TRANSACTIONS. DETERMINATION OF FUNCTIONAL CURRENCY OF FOREIGN OPERATIONS- KEY CONSIDERATIONS

9.  FUNCIONAL CURRENCY IN A HYPERINFLRATIARY ECONOMY IS TO BE RESTATED IN ACCORDANCE WITH IAS 29-FINANCIAL REPORTING IN HYPERINFLATIONARY ECONOMIES.

10.  NET INVESTMENT IN A FOREIGN OPERATION A MONETARY ITEM FOR WHICH SETTLEMENT IS NEITHER PLANNED NOR LIKELY TO OCCUR IN THE FORESEEABLE FUTURE IS, IN SUBSTANCE, A PART OF THE ENTITY’S NET INVESTMENTS IN THAT FOREIGN OPERATION.

11. 10 FOREIGN CURRENCY TRANSACTIONS INITIAL RECOGNITION-WHETHER MONETARY OR NON MONETARY –BY APPLYING SPOT EXCHANGE RATE AT THE DATE OF TRANSACTION. –CAN AN AVERAGE RATE BE USED? SETTLEMENT OF MONETART ITEMS WITHIN THE PERIOD GAIN OR LOSS RECOGNIZE IN P&L

12. 11 FOREIGN CURRENCY TRANSACTIONS AT THE END OF EACH REPORTING PERIOD MONETARY ITEMS –REPORT USING CLOSING RATE –PROFIT OR LOSS ON EXCHANGE RATE ADJUSTMENTS SHOULD BE RECOGNIZED IN INCOME STATEMENT NON MONETARY ITEMS -MEASURED AT HISTORIAL COST-NO ADJUSTMENT -MEASURED AT FAIR VALUE-USE EXCHANGE RATES AT THE DATE WHEN THE FV WAS DETERMINED. -INVENTORY/IMPAIRMENT OF ASSETS?

13.  RECOGNITION OF EXCHANGE DIFFERENCES. WHEN A GAIN OR LOSS ON A NON MONETARY ITEM IS RECOGNIZED DIRECTLY IN OTHER COMPREHENSIVE INCOME, ANY EXCHANGE COMPONENT OF THAT GAIN OR LOSS SHALL BE RECOGNIZED IN OTHER COMPREHENSIVE INCOME. CONVERSELY, WHERE A GAIN OR LOSS ON A NON MONETARY ITEMS IS RECOGNIZED IN PROFIT OR LOSS, ANY EXCHANGE COMPONENT OF THAT GAIN SHALL BE RECOGNIZED IN PROFIT OR LOSS. WILL THERE BE A CONVERSION IN RESPECT NON MONETARY ITEMS?

14.  RECOGNITION OF EXCHANGE DIFFERENCES. EXCHANGE DIFFERNCES ARISING ON A MONETARY ITEM THAT FORMS PART OF A REPORTING ENTITY’S NET INVESTMENTS IN A FOREIGN OPERATIONS SHALL BE RECOGNIZED IN PROFIT AND LOSS ACCOUNT IN THE SEPARATE FINANCIAL STATEMNETS OF THE REPORTING ENTITY OR THE INDIVIDUAL FINANCIAL STATEMENTS OF THE FOREIGN OPERATIONS, AS APPROPRIATE. IN THE FINANCIAL STATEMENTS THAT INCLUDE FOREIGN OPERATIONS AND THE REPORTING ENTITY, SUCH EXCHANGE DIFFERENCES SHALL BE RECOGNIZED INITIALLY IN OTHER COMPREHENSIVE INCOME AND RECLASSIFIED FROM EQUITY TO PROFIT OR LOSS ON DISPOSAL OF NET INVESTMENTS

15.  CHANGE IN FUNCTIONAL CURRENCY WHEN THERE IS A CHANGE IN AN ENTITY’S FUNCTIONAL CURRENCY, THE ENTITY SHALL APPLY THE TRANSLATION PROCEDURE APPLICABLE TO THE NEW FUNCTIONAL CURRENCY PROSPECTIVELY FROM THE DATE OF CHANGE.

16.  TRANSLATION TO THE PRESENTATION CURRENCY -ASSETS AND LIABILITIES SHALL BE TRANSLATED AT THE CLOSING RATE. -INCOME AND EXPENSES SHALL BE TRANSLATED AT EXCHANGE RATES AT THE DATES OF THE TRANSACTIONS AND (CAN THE AVERAGE RATE BE USED?) -ALL RESULTING EXCHANGE DIFFERENCES SHALL BE RECOGNIZED IN OTHER COMPREHENSIVE INCOME.

17.  TRANSLATION TO THE PRESENTATION CURRENCY-OF A HYPERINFLATIONARY ECONOMY -ALL AMOUNTS (INCLUDING COMPARATIVES) SHALL BE TRANSALTED AT THE CLOSING RATE AT THE DATE OF THE MOST RECENT STATEMENT OF FINANCIAL POSITION EXCEPT THAT - WHEN AMOUNTS ARE TRANSLATED INTO THE CURRENCY OF A NON HYPERINFLATIONARY ECONOMY, COMPARATIVE AMOUNTS SHALL BE THOSE THAT WERE PRESENTED AS CURRENT YEAR AMOUNTS IN THE RELEVANT PRIOR YEAR FINANCIAL STATEMENTS. BEFORE APPLYING THE ABOVE, IAS 29 TO BE APPLIED.

18.  TRANSLATION OF A FOREIGN OPERATIONS -SAME PROCEDURE AS THAT OF TRANSLATION TO THE PRESENTATION CURRENCY EXCEPT THAT  ELMINATION OF INTRA GROUP BALANCES AND TRANSACTIONS, AFTER ADJUSTMENT OF EXCHANGE RATE DIFFERENCES IN RESPECT OF MONETARY ITEMS.   ANY GOODWILL ARISING ON THE ACQUISITION OF A FOREIGN OPERATION AND ANY FAIR VALUE ADJUSTMENTS TO THE CARRYING AMOUNTS OF ASSETS AND LIABILITIES ARISING ON THE ACQUISITION OF THAT FOREIGN OPERATION SHALL BE TREATED AS ASSETS AND LIABILITIES OF THE FOREIGN OPERATION. THUS THEY SHALL BE EXPRESSED IN THE FUNCTIONAL CURRENCY OF THE FOREIGN OPERATION AND SHALL BE TRANSLATED AT THE CLOSING RATE

19.  DIPOSAL OR PARTIAL DISPOSAL OF A FOREIGN OPERATION -THE CUMULATIVE AMOUNT OF EXCHANGE DIFFERENCES ACCUMULATED IN THE SEPARATE COMPONENT OF EQUITY, SHALL BE RECLASSIFIED FROM EQUITY TO P&L, WHEN GAIN OR LOSS ON DISPOSAL IS RECOGNIZED.

20.  DIPOSAL OR PARTIAL DISPOSAL OF A FOREIGN OPERATION -ON THE PARTIAL DISPOSAL OF A SUBSIDIARY THAT INCLUDES A FOREIGN OPERATION, THE ENTITY SHALL RE-ATTRIBUTE THE PROPORTIONATE SHARE OF THE CUMULATIVE AMOUNT OF EXCHANGE DIFFERENCES RECOGNIZED IN OTHER COMPREHENSIVE INCOME TO THE NON-CONTROLLING INTERESTS IN THAT FOREIGN OPERATION. IN ANY OTHER PARTIAL DISPOSAL OF A FOREIGN OPERATION THE ENTITY SHALL RECLASSIFY TO P&L ONLY THE PROPORTIONATE SHALL OF THE CUMULATIVE AMOUNT OF THE EXCHANGE DIFFERENCES RECOGNIZED IN OTHER COMPREHENSIVE INCOME..

21.  DISCLOSURE -AMOUNT OF EXCHANGE DIFFERENCE RECOGNIZED IN PROFIT OR LOSS. -NET EXCHANGE DIFFERENCES RECOGNIZED IN OTHER COMPREHENSIVE INCOME AND ACCUMULATED IN A SEPARATE COMPONENT OF EQUITY AND A RECONCILIATION BETWEEN OPENING AND CLOSING DIFFERENCES -IF PRESENTATION CURRENCY IS DIFFERENT FROM FUNCTIONAL CURRENCY THAT SHOULD BE STATED -CHANGE IN FUNCTIONAL CURRENCY