IBERSOL | 2019 Annual Report

2019 ANNUAL REPORT 2.5 CURRENCY EXCHANGE RATE (a) Working currency and financial statement currency The Financial Statements of each group entity are prepared using the currency of the region in which the entity operates (“the working currency”). The consolidated financial statements are presented in euros since this is the working currency which the group uses in the financial statements. (b) Transactions and balances Exchange differences resulting from the settlement of monetary items or from the conversion of monetary items at rates different from those at which they were conver- ted at initial recognition or, in previous financial statements, are recognized in the in- come statement, unless they result from monetary items that are part of of net invest- ment in a foreign operation. In this case, exchange differences are initially recognized in other comprehensive income and are reclassified from equity to the consolidated net income for the year on the total or partial disposal of that operating unit. Exchange differences related to (financial) financing transactions are recorded as fi- nancial costs or income. Exchange differences related to operating activities are recor- ded under the subheadings of “Other operating income / (costs)”. c) Financial statements balance sheet date, profit and loss as well as the cash flows statements are trans- lated into euro using the average exchange rate recorded during the period. The resulting exchange difference is recorded in equity under the heading of exchange rate differences. “Goodwill” and fair value adjustments arising from the acquisition of foreign entities are treated as assets and liabilities of that entity and translated into euro according to the exchange rate at the balance sheet date. When a foreign entity is disposed, the accumulated exchange rate difference is re- cognised in the income statement as a gain or loss on disposal. Currency exchange rate used for conversion of transactions and balances denomi- nated in Kwanzas in 31 December, 2019 and 2018 were respectively: Dec/2019 Euro exchange rates (x foreign currency per 1 Euro) Rate on December, 31 2019 Average interest rate year 2019 Kwanza de Angola (AOA) 536,193 408,497 Dec/2018 Euro exchange rates (x foreign currency per 1 Euro) Rate on December, 31 2018 Average interest rate year 2018 Kwanza de Angola (AOA) 352,983 305,810 219