8. Foreign currency exchange
At the date of implementation, the exchange rate at that date should be used to measure lease liability and ROU asset.
IFRS 16 doesn’t provide specifics for foreign exchange effect. Foreign currency exchange differences follow IAS 21 consistently with other financial liabilities. A lessee’s lease liability is a monetary item and consequently, if denominated in a foreign currency, is required to be remeasured by using closing exchange rates at the end of each reporting period. (BC 196 Foreign currency exchange) (The Basis of Conclusion from IFRS 16)
The exchange differences, relating to lease liabilities denominated in a foreign currency, should be recognized in profit or loss.
The value of the ROU asset doesn’t have any effect on the change in foreign currency and should be recognized to the exchange rate at the date of the transaction (IAS 21.23) or at the rate of the initial implementation. In ShareControl, all contracts are kept in the currency they are registered.