Dear all

My Company has an outstanding USD loan of say US$10m and as our main subsidiaries are operating in China and earns revenue denominated in RMB, which will ultimately flow to our company in terms of RMB dividend (converted to USD due to exchange regulation in PRC).

As we need to make periodic payments say US$1m every quarter, we are considering entering forex contracts to fix the USD/RMB rate that matches the payments (i.e. 10 contracts @US$1m each @ either same conversion price or different conversion price).

How should we disclose this under IAS 32 and classify under which financial instrument class under IAS 39?

Regards

Leslie


 

 

this will  be considered as derivatives as per IFRS

 
Rgds
 
CA