Cash flows in Foreign Currency - Ind AS - Indian Accounting Standards - Companies Law

Cash flows in Foreign Currency Cash flows arising from transactions in a foreign currency shall be recorded in an entity s functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow. Unrealised foreign exchange gain or loss are non-cash items. Hence excluded from statement of cash flows. However, the effect of exchange rate change on cash and cash equivalents held or due in a foreign currency is reported in the Statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is presented separately from statement of cash flows and includes the differences, if any, had those cash flows been reported at the end of period exchange rates. Cash Flows of Foreign Subsidiary - The cash flows of a foreign subsidiary shall be translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows. Cash flows denominated in a foreign currency are reported in a manner consistent with Ind AS 21, The Effects of Changes in Foreign Exchange Rates. This permits the use of an exchange rate that approximates the actual rate. For example, a weighted average exchange rate for a period may be used for recording foreign currency transactions or the translation of the cash flows of a foreign subsidiary. However, Ind AS 21 does not permit use of the exchange rate at the end of the reporting period when translating the cash flows of a foreign subsidiary. Treatment of Unrealised gains or loss on foreign currency exchange - Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. However, the effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is presented separately from cash flows from operating, investing and financing activities and includes the differences, if any, had those cash flows been reported at end of period exchange rates.