Foreign currency translation

Business transactions in foreign currency are translated into the functional currency in the separate financial statements by applying the spot rate prevailing at the time of the transaction. Gains and losses arising from the settlement of such transactions and from the translation of foreign currency monetary assets and liabilities as at the reporting date are recognised in profit or loss.

Franz Haniel & Cie. GmbH’s reporting currency is the euro. The foreign currency amounts indicated in the financial statements of companies outside the euro zone that are included in the consolidated financial statements are translated using the concept of functional currency in accordance with IAS 21. Given that the subsidiaries operate as financially, economically and organisationally independent entities, their respective local currency is the functional currency. The assets and liabilities of companies outside the euro zone are translated at the closing rate, while their income statement items are translated at average annual exchange rates. Goodwill resulting from the acquisition of foreign companies is assigned to the acquired company and translated at the closing rate. All resulting exchange differences are recognised in other comprehensive income. The exchange rates that are most relevant for Haniel’s consolidated financial statements are:

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  2015 2014
EUR Average
exchange rate
Closing rate Average
exchange rate
Closing rate
UK pound sterling (GBP) 0.7255 0.7340 0.8058 0.7789
Swiss franc (CHF) 1.0669 1.0835 1.2145 1.2024
US dollar (USD) 1.1087 1.0887 1.3262 1.2141