Dear

I am in a financial organization. Our company pays some expenses (e.g. salary, fees) with foreign currency. In every month we prepare P/L account with local currency. We also perform currency exchange and change our sale/bye rate according to central bank and also booked exchange gain/loss determining mid rate. So, in which rate we convert such foreign curreny expenses with local currency to show in the P/L account monthly as well as yearly? As currency rate is variable, so at year end which rate will be applicable to prepare yearly Trial Balance. I have presented 2 scnerion bellow on expense and profit calculation base on mid rate. Please give details as per IFRS/IAS on such conversion rate.

Scenerio – 1

Month USD Rate Monthly Exp. in Local Currency Accumulated Expenses
Calculation Method Amount
Jan 10 49 (10*49)-00 490 490
Feb 10 50 (20*50)-490 510 1000
March 10 49 (30*49)-1000 470 1470
Dec 10 51 (40*51)-1470 570 2040
Total for the period 2040

P/L Account (local Currency)

Month Profit/(Loss) Accumulated Profit/(Loss)
Jan (490) (490)
Feb (510) (1000)
March (470) (1470)
Dec (570) (2040)

Scenerio – 2

Month USD Rate Monthly Exp. In Local Currency Accumulated Expenses
Calculation Method Amount
Jan 10 49 490 10*49 490
Feb 10 50 500 20*50 1000
March 10 49 490 30*49 1470
Dec 10 51 510 40*51 2040
Total for the period 1990

P/L Account (local Currency)

Month Profit/(Loss) Accumulated Profit/(Loss)
Jan (490) (490)
Feb (500) (990)
March (490) (1480)
Dec (510) (1990)

Any of the above calculation is correct? or which is the calculation method as IFRS/IAS

Regards

Tohel