Question
Where to recognise foreign exchange differences in template F46 for 0010 (Capital) and c0020 (Share Premium)?
Background on the question
The entity's financial statements are denominated in USD and are converted to EUR only for FINREP purposes. As per Q&A 2022_6520, we have been instructed that in template F 46.00, 'opening balance (before restatement row 0010) shall match the prior period closing balance'. Also, we have been instructued to consider any foreign exchange differences ‘as a movement of the year and reported in one of the rows from 0050 to 0200, depending on the items' in template F46. In c0010 (Capital) and c0020 (Share Premium), it seems that movement for the year should fall under one of the below since the rest of the items are greyed out: Issuance of Ordinary Shares Issuance of Preference Shars Conversion of Debt to Equity Capital Reduction Dividends Reclassification of Financial Instruments from Equity to Liability Reclassification of Financial Instruments from Liability to Equity Equity increase or (-) decrease resulting from business combinations Share based payments Our movement for the year for c0010 (Capital) and cc020 (Share Premium) consists of purely foreign exchange difference given that the opening USD balances must be converted to EUR at the rates used in the prior financial year as per Q&A 2022_6520, whereas the closing USD balances must be converted at the prevailing rates on reporting date.
Answer
The foreign exchange differences referred to Capital and Share Premium are included as components in other comprehensive income. As a consequence, in template F 46.00 the accounting impact of these differences are reported in row 0190 (Other increase or (-) decrease in equity) and in column 050 (Accumulated other comprehensive income). This approach is consistent with the templates F. 01.03 and F. 03.00 in which foreign exchange differences referred to Capital and Share Premium are included respectively in row 0140 (for the template F. 01.03) and in row 0150 (for the template F. 03.00).