2.5Foreign currency translation
2.5.1Functional currency and presentation currency
Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Chilean pesos, which is the parent company’s functional currency and the Company´s presentation currency.
2.5.2Balances and transactions
Foreign currency transactions are translated into the functional currency using the foreign exchange rates prevailing on the dates of the transactions. Losses and gains in foreign currency resulting from the liquidation of these transactions and the translation at the closing exchange rate of monetary assets and liabilities denominated in foreign currency are recognized in the income statements under foreign exchange rate differences, except when they correspond to cash flow hedges; in which case they are presented in the statement of comprehensive income.
The exchange rates and value of the UF at the close of each of the periods presented were as follows:
|
|
|
Exchange rate to the Chilean peso |
|
||||||||||
|
Date |
|
US$ |
|
R$ Brazilian |
|
A$ Argentine |
|
UF Unidad de |
|
Paraguayan |
|
€ |
|
|
12.31.2017 |
|
614.75 |
|
185.84 |
|
32.96 |
|
26,798.14 |
|
0.110 |
|
739.15 |
|
|
12.31.2016 |
|
669.47 |
|
205.42 |
|
42.13 |
|
26,347.98 |
|
0.116 |
|
705.60 |
|
|
12.31.2015 |
|
710.16 |
|
181.87 |
|
54.46 |
|
25,629.09 |
|
0.1217 |
|
774.61 |
|
2.5.3Translation of foreign subsidiaries
The financial position and results of all entities in the Company (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
|
(i) |
Assets and liabilities for the statement of financial position are translated at the closing exchange rate as of the reporting date; |
|
(ii) |
Revenue and expenses of the income statement are translated at average exchange rates for the period; and |
|
(iii) |
All resulting translation differences are recognized in other comprehensive income. |
The companies that have a functional currency different from the presentation currency of the parent company are:
|
Company |
|
Functional currency |
|
Rio de Janeiro Refrescos Ltda. |
|
R$Brazilian Real |
|
Embotelladora del Atlántico S.A. |
|
A$Argentinean Peso |
|
Andina Empaques Argentina S.A. |
|
A$Argentinean Peso |
|
Paraguay Refrescos S.A. |
|
G$Paraguayan Guaraní |
In consolidation, translation differences arising from the translation of net investments in foreign entities are recognized in other comprehensive income. Exchange differences from accounts receivable, which are considered part of an equity investment, are recognized as comprehensive income net of deferred taxes, if applicable. On disposal of the investment, such translation differences are recognized in the income statement as part of the gain or loss on the disposal of the investment.