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5.5 Measurement of transactions and balances denominated in foreign currencies and FX rates used

PZU AR 2021 > Results > Supplementary information and notes > 5. Key accounting policies, key estimates and judgments > 5.5 Measurement of transactions and balances denominated in foreign currencies and FX rates used
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Transactions carried out in a currency other than Polish zloty are recognized at the exchange rate set by the National Bank of Poland (NBP) for the transaction date. At the end of the reporting period, cash items denominated in foreign currencies are translated using the average NBP exchange rate in effect on that date. Non-cash items measured at fair value and denominated in foreign currencies are measured using the average NBP exchange rate in effect on the date on which the fair value is determined. Gains and losses on currency translation are recognized directly in the profit and loss account.

Financial data of foreign subsidiaries are converted into Polish zloty as follows:

  • assets and liabilities – at the average exchange rate set by the National Bank of Poland at the end of the reporting period;
  • items of the profit and loss account, other comprehensive income and cash flows – at the arithmetic mean of average exchange rates set by the National Bank of Poland as at the dates ending each month of the reporting period.

Translation differences are recognized under “Foreign exchange translation differences” in equity. The following FX rates have been used for these consolidated financial statements:

FX rates used for translation of financial data of foreign related parties 1 January –
31 December 2021
1 January –
31 December 2020
31 December 2021 31 December 2020
Euro 4.5775 4.4742 4.5994 4.6148
British pound 5.3308 5.0240 5.4846 5.1327
Ukrainian hryvnia 0.1422 0.1439 0.1487 0.1326