Monetary items are remeasured at the closing rate with exchange differences in profit or loss; non-monetary items stay at the transaction-date rate. Translation differences of foreign subsidiaries are tracked in other comprehensive income.
Source: TMS 21
Related terms
Functional currencyThe currency of the primary economic environment in which the entity operates.Exchange differencesThe difference arising from translating foreign-currency items at exchange rates on different dates.Monetary and non-monetary itemsMonetary items are assets and liabilities to be received or paid in a fixed or determinable amount of money (cash, receivables, payables); all others are non-monetary (inventory, property, equity).Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: November 8, 2026 · This definition is for general information only.