I would really appreciate if you could help me with one question.
I work in a real estate company which sells villas. The functional currency is Albanian Lek (AL), but we sell villas in Euros and so are the most of costs (cost of villas).
We apply IFRSs for our financial statements.
Cost of villas is in Eur and when the costs have been recorded, the exchange rate has been 1 eur = 130- 140 All during a period of three years .
Now when we are selling the villa and recognise revenue, the exchange rate is 1 Eur= 122 all.
So when we translate revenues and costs of goods sold( after selling inventory (villa) ), it results in a huge exchange loss due to exchange rate fluctuations.
Is there any way or method to eliminate this exchange loss as it affects P&L.
You would help me so much with this issue!
Wish all the best for all of you!