CREDO REFERENCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is USD.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss
Financial instruments are recognised in the company's Balance sheet when the company becomes
party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to
settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are
initially measured at their transaction price including transaction costs and are subsequently carried
at their amortised cost using the effective interest method, less any provision for impairment, unless
the arrangement constitutes a financing transaction, where the transaction is measured at the
present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash
equivalents, trade and most other receivables due with the operating cycle fall into this category of
financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the
estimated future cash flows derived from the financial asset(s) have been adversely impacted. The
impairment loss will be the difference between the current carrying amount and the present value of
the future cash flows at the asset(s) original effective interest rate.
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