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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 measured at the closing date exchange rate. Non-monetary assets and liabilities that are measured at fair value 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 incurred by exchange rate fluctuations 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 measured at fair value through other comprehensive income
  • Hedging instruments qualifying for cash flow hedges

Hyperinflation

As of June 2022, Turkey is classified as a hyperinflationary economy in accordance with IAS 29 (Financial Reporting in Hyperinflationary Economies). As a result, the activities of METRO companies in Turkey will no longer be retroactively based on historical acquisition and production costs for the entire financial year 2021/22; instead, they are presented with the purchasing power ratios as of the closing date.

For this purpose, the carrying amounts of the non-monetary assets and liabilities as well as the statement of comprehensive income are converted into the purchasing power valid at the closing date using the cumulative consumer goods price index of the Turkish Statistical Institute. No adjustment is required for monetary assets and liabilities as they are already measured in the applicable measuring unit (for example in the fair value) at the closing date.

The index value applied at the closing date was 1,046.89 (30/9/2021: 570.66), while the index stood at 1.8345 on an annual basis in 2022.

The exchange rate at the closing date as of 30 September 2022 was used to convert the financial statements of the Turkish companies into the reporting currency euro for all items. According to IAS 21.42 (The Effects of Changes in Foreign Exchange Rates), comparative amounts from previous periods do not have to be converted.

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 euros 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 in which the subsidiary operates. 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 at the closing date. As a general 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 the parent company does not own all equity interests in foreign subsidiaries, 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.

The following exchange rates being of major significance for METRO were applied in the translation of key currencies outside the European Monetary Union. The rates are generally based on ECB information. In the absence of a rate provided by the ECB, the quotation of the Russian Central Bank was used for conversion of the Russian rouble.

 

 

Average exchange rate per €

Average exchange rate per €

 

 

2020/21

2021/22

30/9/2021

30/9/2022

Egyptian pound

EGP

18.76426

18.76039

18.18770

18.99900

Pound sterling

GBP

0.87384

0.84711

0.86053

0.88300

Bulgarian lev

BGN

1.95583

1.95583

1.95583

1.95583

Chinese renminbi

CNY

7.77989

7.09353

7.48470

6.93680

Hong Kong dollar

HKD

9.28025

8.48381

9.01840

7.65210

Indian rupee

INR

88.02535

83.17465

86.07660

79.42500

Indonesian rupiah

IDR

17,135.09000

15,738.27000

16,572.03000

14,863.26000

Japanese yen

JPY

128.50236

134.40107

129.67000

141.01000

Kazakhstani tenge

KZT

508.04742

489.03414

496.42000

462.20000

Croatian kuna

HRK

7.53955

7.52974

7.48890

7.53450

Macanese pataca

MOP

9.55683

8.74083

9.30450

7.94380

Malaysian ringgit

MYR

4.92941

4.65971

4.84750

4.52010

Moldovan leu

MDL

20.99757

20.00568

20.59550

18.99170

Myanmar kyat

MMK

1,781.00822

2,012.33068

2,236.50000

2,056.50000

Pakistani rupee

PKR

187.71887

207.61483

184.07250

223.06640

Philippine peso

PHP

58.25465

57.13600

59.06600

57.27600

Polish zloty

PLN

4.53714

4.65803

4.61970

4.84830

Romanian leu

RON

4.90144

4.93848

4.94750

4.94900

Russian rouble

RUB

89.14979

78.62344

84.33910

55.40640

Swiss franc

CHF

1.08737

1.02270

1.08300

0.95610

Serbian dinar

RSD

117.57386

117.53102

117.55950

117.31790

Singapore dollar

SGD

1.60287

1.48597

1.57600

1.40010

Thai Baht

THB

37.39407

37.13624

39.23500

36.82300

Czech koruna

CZK

25.97336

24.81236

25.49500

24.54900

Turkish lira

TRY

9.62548

18.08410

10.29810

18.08410

Ukrainian hryvnia

UAH

33.08211

32.31038

30.82310

35.63610

Hungarian forint

HUF

357.56318

379.38342

360.19000

422.18000

US dollar

USD

1.19541

1.08474

1.15790

0.97480

UAE dirham

AED

4.39049

3.98299

4.25075

3.59225

Vietnamese dong

VND

27,701.87000

25,162.80000

27,063.56000

22,321.11000

Fair value
Recognised fair value that would be 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

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