Currency translation

Foreign currency transactions

In the separate financial statements of the subsidiaries and the parent company, transactions in foreign currency are recognised at the rate prevailing on the transaction date. Monetary assets and liabilities in foreign currency are valued at the closing date exchange rate. Non-monetary assets and liabilities that are measured at in foreign currency are translated at the rate prevailing at the time the fair value was determined. Non-monetary items measured at historical acquisition or production costs in foreign currency are translated at the rate of the transaction date.

In principle, gains and losses from exchange rate fluctuations incurred until the closing date are recognised in profit or loss. However, the currency translation differences resulting from the subsequent measurement of the following assets and liabilities are reported under reserves retained from earnings outside of profit or loss:

  • Receivables and liabilities in foreign currency, which must be regarded as (part of) a net investment in a foreign operation
  • Equity instruments at fair value through other comprehensive income
  • Hedging instruments qualifying for cash flow hedges

Foreign operations

The annual financial statements of foreign subsidiaries are prepared according to the functional currency concept of IAS 21 (The Effects of Changes in Foreign Exchange Rates) and translated into euro for consolidation purposes in case their functional currency is a currency other than the euro. The functional currency is defined as the currency of the primary economic environment of the subsidiary. Since all companies included in the consolidated financial statements operate as financially, economically and organisationally autonomous entities, their respective local currency is the functional currency. Necessary translations of assets and liabilities are made at the exchange rate on the closing date. As a rule, income statement items are translated at the average exchange rate during the financial year. Exchange rate differences arising from the translation of the financial statements of foreign subsidiaries are recognised directly in equity and are reported separately under reserves retained from earnings in other comprehensive income. To the extent that foreign subsidiaries are not under the full control of the parent company, the relevant share of currency differences is allocated to the non-controlling interests.

Currency differences are recognised through profit or loss in the net financial result in the year in which the operations of a foreign subsidiary whose functional currency is not the euro are deconsolidated or terminated. In a partial disposal in which a controlling interest in such a foreign subsidiary is retained, the relevant share of cumulated currency differences is allocated to the non-controlling interests. Should associates or jointly controlled entities, whose functional currency is not the euro, be partially sold without the loss of significant influence or joint control, the relevant share of the cumulated currency differences is recognised in profit or loss.

In financial year 2018/19, no functional currency of a consolidated company was classified as hyperinflationary as defined by IAS 29 (Financial Reporting in Hyperinflationary Economies).

The following exchange rates being of major significance for METRO were applied in the translation of key currencies outside the European Monetary Union:

 

 

Average exchange rate per €

Exchange rate at closing date per €

 

 

2017/18

2018/19

30/9/2018

30/9/2019

Bulgarian lev

BGN

1.95583

1.95583

1.95583

1.95583

Chinese renminbi

CNY

7.78072

7.75616

7.96620

7.77840

Croatian kuna

HRK

7.44639

7.41336

7.43460

7.41100

Czech koruna

CZK

25.59342

25.74114

25.73100

25.81600

Danish krone

DKK

7.44841

7.46385

7.45640

7.46620

Egyptian pound

EGP

21.14591

19.48706

20.96995

17.75290

Hong Kong dollar

HKD

9.32227

8.83913

9.05790

8.53680

Hungarian forint

HUF

315.96660

323.02241

324.37000

334.83000

Indian rupee

INR

79.17455

79.65100

83.91600

77.16150

Indonesian rupiah

IDR

16,563.99000

16,160.21000

17,249.98000

15,456.94000

Japanese yen

JPY

131.44140

124.14090

131.23000

117.59000

Kazakhstani tenge

KZT

399.50173

427.11378

420.91000

423.49000

Malaysian ringgit

MYR

4.79783

4.67447

4.78900

4.55920

Moldovan leu

MDL

20.07596

19.72835

19.76180

19.39590

Myanmar kyat

MMK

1,643.89863

1,728.93370

1,816.30000

1,675.90000

Norwegian krone

NOK

9.59644

9.73765

9.46650

9.89530

Pakistani rupee

PKR

136.55544

163.05191

144.19130

170.90740

Philippine peso

PHP

62.00207

59.03683

62.64800

56.55300

Polish złoty

PLN

4.24399

4.30027

4.27740

4.37820

Pound sterling

GBP

0.88479

0.88412

0.88730

0.88573

Romanian leu

RON

4.64422

4.71851

4.66380

4.74960

Russian rouble

RUB

72.23349

73.82877

76.14220

70.75570

Serbian dinar

RSD

118.46441

118.06690

118.41790

117.52830

Singapore dollar

SGD

1.59897

1.54212

1.58390

1.50600

Swiss franc

CHF

1.16162

1.12274

1.13160

1.08470

Turkish lira

TRY

5.24182

6.32660

6.96500

6.14910

UAE dirham

AED

4.37170

4.14292

4.26510

4.00630

Ukrainian hryvnia

UAH

32.08969

30.17616

32.72527

26.34863

US dollar

USD

1.19026

1.12799

1.15760

1.08890

Vietnamese dong

VND

26,816.38000

25,903.60000

26,722.01000

25,457.19000

Fair value
Recognised fair value. Amount that would have been received in return for the disposal of an asset or paid for the assignment of a debt in an ordinary transaction conducted between market participants on the assessment date.
Glossary