Foreign Currency Translation

In the Group companies’ individual financial statements, all of the receivables and liabilities in foreign currencies are translated at the rate prevailing on the statement of financial position date, regardless of whether or not they have been hedged. Forward contracts which, from an economic point of view, are used for hedging are reported at fair value.

The financial statements of consolidated companies which are prepared in the local currencies are translated on the basis of the functional currency principle using the modified reporting date rate method. As the Group’s subsidiaries conduct their business along autonomous lines financially, commercially, and organizationally, the functional currency is basically identical to the company’s local currency. In the consolidated financial statements, expenses and income from the financial statements of subsidiaries prepared in a foreign currency are, therefore, basically translated at the average rate for the year, whereas assets and liabilities are translated at the closing date rate. Any currency differences arising from the translation of equity are recognized in the other equity items. Translation differences resulting from divergent exchange rates in the statement of income are likewise included. If any Group companies are removed from the scope of consolidation, any translation difference is reclassified from equity to profit or loss.

The exchange rates of the most important currencies reported in these financial statements have fluctuated against the euro as follows:

 download table

 

 

ISO Code

 

Rate on reporting date

 

Average rate

 

 

 

 

Dec. 31, 2009

 

Dec. 31, 2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

US dollar

 

USD

 

1.44

 

1.41

 

1.39

 

1.47

Japanese yen

 

JPY

 

132.98

 

127.23

 

130.14

 

152.17

Singapore dollar

 

SGD

 

2.02

 

2.02

 

2.02

 

2.08

Chinese renminbi

 

CNY

 

9.84

 

9.61

 

9.52

 

10.22