201809 Q1(a), consolidation of foreign subsidiaries

Per IAS 21: "income and expenses are translated at the exchange rates at the dates of the transactions (or at the average rate for the period when this is a reasonable approximation)." "For practical reasons, a rate that approximates the actual rate at the date of the transaction is often used, for example, an average rate for a week or a month might be used for all transactions in each foreign currency occurring during that period. However, if exchange rates fluctuate significantly, the use of the average rate for a period is inappropriate." I would say that if you are looking at an expense/income item that is made up of relatively few large transactions the actual rates should be used. But if the population is made up of thousands of individually small amounts an average is a practical expedient as long as exchange rates are not fluctuating significantly - in which case a single average for a year would not be appropriate (but it might be appropriate to use monthly averages, say).