ANNUAL INTEGRATED REPORT 2021
ANNUAL INTEGRATED REPORT 2021 | AXTEL
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When there is a change in the functional currency of one of the
subsidiaries, according to the IAS 21, Effects of Changes in Foreign
Currency Exchange Rates, this change is accounted for prospectively,
translating at the date of the functional currency change, all assets,
liabilities, equity and income items at the exchange rate on that
date.
ii. Transactions and balances
Transactions in foreign currencies are translated into the
functional currency using the foreign exchange rates prevailing
at the transaction date or valuation date when the amounts are
remeasured. Gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at the closing
exchange rates are recognized as foreign exchange gain or loss in
the consolidated statement of income, except for those which are
deferred in comprehensive (loss) income and qualify as cash flow
hedges.
The exchange differences in monetary assets classified as financial
instruments at fair value with changes through profit or loss are
recognized in the consolidated statement of income as part of the
gain or loss in fair value.
Translation of subsidiaries with recording currency other than the
functional currency.
The financial statements of foreign subsidiaries, having a recording
currency different from their functional currency were translated
into the functional currency in accordance with the following
procedure:
a. The balances of monetary assets and liabilities denominated in the
recording currency were translated at the closing exchange rate.
b. To the historical balances of monetary assets and liabilities and
stockholders' equity translated into the functional currency
the movements that occurred during the period were added,
which were translated at historical exchange rates. In the case
of the movements of non-monetary items recognized at fair
value, which occurred during the period stated in the recording
currency, these were translated using the historical exchange
rates in effect on the date when the fair value was determined.
c. Revenues, costs and expenses of the periods, expressed in the
recording currency, were translated at the historical exchange
rates of the date they were accrued and recognized in the
consolidated statement of income, except when they arose from
non-monetary items, in which case the historical exchange rate
of the non-monetary items was used.
d. The exchange differences arising in the translation are recognized
in the consolidated statement of income in the period they arose.
The primary exchange rates in the different translation procedures
are listed below:
Country
United States
Local currency to Mexican pesos
Closing exchange rate as
of December 31,
Average annual
exchange rate
Local currency
U.S. dollar
2021
20.58
2020
19.95
2019
18.85
2021 2020
20.38 21.50
2019
19.27
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