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Loans
Bank deposits
Other items that are not monetary items but are treated similarly because they are carried at up-todate values include:
Marketable securities that are carried at fair value
Investments carried at cost are not monetary items either, nor are prepayments. Provisions may or may
not be monetary depending on whether they are to be settled by payment of a fixed or determinable
amount of money.
ACCOUNTING FOR TRANSACTIONS IN FOREIGN CURRENCY
Initial Recognition
PAS 21, par. 21 states that, A foreign currency transaction shall be recorded, on initial recognition in the
functional currency, by applying to the foreign currency amount the spot exchange rate between the
functional currency and the foreign currency at the date of the transaction.
At the end of the reporting period
PAS 21, par. 23 further states that:
At the end of each reporting period:
(a) foreign currency monetary items shall be translated using the closing rate;