5 Currency translation
In the individual financial statements of the consolidated companies, which are prepared in local currencies, monetary items in foreign currencies (cash and cash equivalents, receivables, and liabilities) are measured at the reporting date exchange rate and recognized in profit or loss. Non-monetary items denominated in foreign currencies are posted at their historic exchange rates.
The financial statements of the companies included in consolidation that are prepared in foreign currency are translated on the basis of the functional currency concept (IAS 21) in accordance with the modified closing rate method. As our subsidiaries financially, economically, and organizationally effect their transactions on an independent basis, the functional currency is the same as each subsidiary’s respective local currency. Assets and liabilities are therefore translated at the closing rates, and expenses and income at the average exchange rates, for the year. The difference resulting from the foreign currency translation is offset against retained earnings in equity.
Currency differences arising as against the previous year’s translation in the Heidelberg Group are also offset against retained earnings in equity.
Accounting in line with IAS 29 was not required as the Heidelberg Group does not have any subsidiaries located in countries with hyperinflationary economies.
Currency translation is based on the following exchange rates:
|Average rates of the year||Reporting date rates|
AUD = Australian dollar CAD = Canadian dollar CHF = Swiss franc CNY = Chinese yuan GBP = Pound sterling HKD = Hong Kong dollar JPY = Japanese yen USD = US dollar