Naira presentation under FRC Rule 8

Why Nigerian statements are presented in naira under FRC Rule 8 even when the functional currency differs, and how the annexure and rates are shown.

By Achekam · 11 October 2026 · 4 min read · For Accountants & audit firms in Nigeria

An oil services company earns and spends mostly in US dollars. A shipping agent bills in euros. A subsidiary of a foreign group keeps its books in its parent's currency. For each of these Nigerian clients, the functional currency may well not be the naira, and the finance team naturally wants its statements in the currency it thinks in.

The Financial Reporting Council's Rule 8 says the general-purpose statements are presented in naira all the same, and offers a way to show the other currency alongside. This article sets out how the two fit together, where the exchange rates come from, and how a firm prepares the set.

Functional currency and presentation currency

IAS 21 draws the distinction that makes Rule 8 workable. It defines an entity's functional currency as the currency of the primary economic environment in which it operates, the environment in which it primarily generates and expends cash; any other currency is a foreign currency. IAS 21 also prescribes how an entity translates its own financial statements into a presentation currency, if that differs from its functional currency.

On presentation, IAS 21 itself is permissive: it lets an entity present its financial statements in any currency, or currencies. The client keeps its functional currency for measurement. The question Rule 8 answers is narrower: which currency the general-purpose statements are presented in.

Naira for every general-purpose set

Under FRC Rule 8, the presentation currency for all general-purpose financial statements in Nigeria is the Nigeria Naira. The Rule spells out its reach: statements filed for statutory purposes, and those presented to directors, shareholders, creditors and other stakeholders.

So a client whose functional currency is the dollar still presents its general-purpose statements in naira, translating from its functional currency. A reporting pack that a subsidiary prepares for its foreign parent's consolidation is a different document from its general-purpose statements, and may well stay in the parent's currency; the Rule speaks of the general-purpose set. That set must be in naira whichever framework the client uses; IFAC's Nigeria profile says public interest entities apply IFRS Accounting Standards and small and medium-sized entities apply IFRS for SMEs, both under standards issued by the FRC.

An annexure in the functional currency

Rule 8 does not make the functional currency disappear. Rule 8(h) and (i) allow an annexure of the main statements in the functional currency as supplementary information, provided the exchange rates used are disclosed.

Three conditions follow from that wording. The annexure is supplementary, not a second set of primary statements. It covers the main statements. And the rates used to move between the two must be disclosed, so a reader can see how the naira figures relate to the functional-currency ones.

The CBN rate as the source

For Nigerian work, the natural source of rates is the Central Bank of Nigeria. The CBN says the Nigerian Foreign Exchange Market rate, the NFEM rate, is derived at volume weighted average and stands as the official exchange rate for the day. The CBN's exchange rates page publishes the table, one row per trading date.

As an example of what the table shows: on 9 October 2026, the NFEM rate was ₦1,331.1860 to the US dollar, with a highest rate of ₦1,333.5000, a lowest of ₦1,330.5500 and a closing rate of ₦1,332.4900. That is one day's reading. For translation, use the row for the relevant date, never a figure copied from an article, and keep a dated capture of each rate used as evidence for the disclosure.

Which rate applies to which balance is a matter for IAS 21's translation requirements; the IFRS Foundation notes that the principal issues the Standard deals with are which exchange rates to use and how to report the effects of changes in them. The year-end side of that question is covered in year-end translation at the CBN rate.

Loading the trial balance and presenting the set in Achekam

Achekam builds statements from the trial balance it is given. Staff can upload a trial balance as an Excel workbook, a CSV file or a PDF that has a text layer, and Achekam reads it into a trial balance. From a mapped trial balance, the Studio builds a draft set of annual financial statements with every figure calculated in code, including the directors' report, the four primary statements, policies, notes and a detailed income statement.

So the translation from functional currency to naira is done in the firm's own working, and the naira trial balance is what is loaded. Keep the working on file next to the rates evidence: it is the link between the client's books and the statements.

For the annexure and the rate disclosure, a firm can add its own statement lines and groups and change the wording of any row title, and later builds keep those choices. That keeps headings such as the annexure's title and the description of rates in the firm's chosen words from one year to the next.

Reviewer checks

The naira requirement reaches the supplementary schedules too, including those under Rule 7; see value added statement and five-year summary.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.