Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date.
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. Nonmonetary
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 except when deferred in other comprehensive income as
qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the Statement of income and retained earnings within 'finance income or costs'. All other
foreign exchange gains and losses are presented in profit or loss within 'other operating income'.