Effective as per 01-01-2018 - IFRC22 - Foreign Currency Transactions and Advance Consideration.
We are an Online Travel Agent and acting like an agent according to IAS 18 and IFRS 15.
Our revenue is the commission on trips (no package deals created by our company), price is determined by the actual operator.
I assume we have the focus on non-monetary customer prepayments and operator prepayments, both in foreign currencies (other than reporting currency EUR). We are allowed to recognize revenue once there is no cancellation option for the customer any more.
How to deal with the received prepayments and payments made to the final operators?
Example: (note: company has USD and EUR bank account)
Day 01 – customer prepayment 1.000 USD – fx to EUR = 1:1
Day 10 – prepayment by us to Operator 3.000 THB – fx to EUR= 1:30
Day 20 – prepayment by us to Operator 20.000 THB – fx to EUR= 1:25
Day 30 – cancellation date, on date of Revenue recognition:
1 EUR = 0,80 USD
1 EUR = 35 THB
According to IFRIC 22 (effective 01-01-2018) you should take the fx on the actual “transaction date”. By this, it means that we will have the following result to be determined on Day 30:
Revenue customer part: 1.000 / 1 = EUR 1.000
Revenue operator part: – 3.000 / 30 = – EUR 100
Revenue operator part: – 20.000 / 25 = – EUR 800
Total revenue result in the P&L to be taken / shown: EUR 100,-
No FX result should be shown in the report, based on IFRIC 22.
Is that the right conclusion? Or does someone has a different opinion on this? Thanks for your support.
