Which CBN rate to use at a client's year end
Reading the CBN's NFEM table for a Nigerian client's year-end dollar balances, choosing a column, and keeping evidence of the rate on file.
By Achekam · · 5 min read · For Accountants & audit firms in Nigeria
A client imports machinery and owes a supplier in dollars at 31 December. It also holds a domiciliary account and is owed money by a buyer in Ghana. Every one of those balances has to be stated in naira in the year-end trial balance, and the junior on the file has opened the Central Bank of Nigeria's website to find a rate. She comes back with a question: the page shows several numbers for the same day. Which one goes into the statements?
The answer is partly a matter of reading the CBN's tables correctly and partly a judgement the engagement team must make, document and apply the same way every year. This article covers both.
The NFEM official rate for the day
The CBN publishes rates for the Nigerian Foreign Exchange Market (NFEM) in a table quoted in naira per US dollar. In a footnote to that table, the CBN says the NFEM rate is derived at Volume Weighted Average and stands as the official exchange rate for the day.
Next to that official rate, the same row shows the day's highest rate, lowest rate and a closing rate. So "the CBN rate" is not a single number. For a dollar balance, the realistic candidates are the official volume-weighted rate and the closing rate for the reporting date.
The IFRS Foundation's summary of IAS 21 notes that the principal issues the standard deals with are which exchange rate or rates to use and how to report the effects of changes in rates. That is exactly the decision the team faces here, and the standard itself, rather than habit, should drive it. Record which NFEM column the firm uses for year-end balances and why, and apply it the same way across clients unless a client's circumstances justify a different choice.
Finding the row for the reporting date
The NFEM table has one row per trading date. To show what a row looks like: for 9 October 2026 the CBN listed an official rate of ₦1,331.1860 to the dollar, a highest rate of ₦1,333.5000, a lowest of ₦1,330.5500 and a closing rate of ₦1,332.4900. Those figures are an illustration of the layout only. A year-end translation uses the row for the client's own reporting date, never a figure copied from an article or a previous file.
Two practical problems come up every year:
- Year ends on non-trading days. If 31 December falls on a weekend or public holiday, there will be no row for it. Decide in advance which row the firm then uses, write the rule down, and follow it.
- Rates looked up late. Staff often find the rate weeks after year end, when the page has moved on. Look the rate up as close to the reporting date as possible, or make sure the historical table can still be filtered back to the date you need.
The CBN's exchange rates page carries both the NFEM table and the wider currency table, and is the one source the engagement file should cite.
Buying, central and selling rates for other currencies
Clients rarely deal only in dollars. For other currencies the CBN publishes a separate currency rates table with a buying, central and selling rate for each. On 9 October 2026 that table gave the US dollar a buying rate of 1330.1860, a central rate of 1330.6860 and a selling rate of 1331.1860, and pound sterling a central rate of 1758.5015.
Two cautions apply. The table does not state its unit on the page, so the file note should say how the team read it. And the dollar's selling rate in that table matched the NFEM official rate for the same day, which suggests how the two tables relate but does not settle which column suits a sterling or euro balance. Treat the choice of buying, central or selling rate as part of the same documented policy as the dollar decision, not something each preparer picks afresh.
Booking the translation differences
Once the rate is fixed, the work is mechanical, and it should be traceable.
In Achekam, lead schedules are built from the engagement's trial balance, and each figure can be traced to the lines behind it. Where the client's books carry a foreign balance at an old rate, staff record the audit adjustment on the relevant line with a reason, for example "retranslate US dollar trade payable to the NFEM closing rate at reporting date". The reason travels with the adjustment, so a reviewer does not have to reconstruct the logic.
For clients with many foreign balances, a spreadsheet works better than a series of one-line adjustments. A working paper can carry a workbook whose figures refresh from the engagement's trial balance; Achekam lists any figure it could not read, rather than leaving a silent gap. Put the foreign-currency amounts, the rate used and the naira result side by side, so the reviewer can see each translation in one place.
Keeping a dated copy of the rate
A rate that cannot be evidenced later is a finding waiting to happen. Rates pages change and old rows are hard to retrieve once a regulator or reviewer asks.
At the time of the lookup, save a copy of the page or an export showing the date, the table, the column used and the rate. File it in the client's folder in Achekam's Document Centre, which keeps versions and tags and lets staff search across a client's documents later. A tag such as "FX year end" means next year's team finds it straight away.
A short checklist for the file:
- The reporting date and the CBN row used (or the rule applied if there was no row).
- The table and column chosen: NFEM official, NFEM closing, or buying, central or selling.
- A dated copy of the page showing the rate.
- The workbook or lead schedule showing each balance translated.
- Any adjustment posted, with its reason.
Disclosing the rates used
FRC Rule 8 sets the Nigeria naira as the presentation currency for all general-purpose financial statements in Nigeria, including statements filed for statutory purposes and those presented to directors, shareholders, creditors and others. The rule allows the main statements in the entity's functional currency to be shown as an annexure, as supplementary information, provided the exchange rates used are disclosed.
That gives a clean test for the disclosure note: if a reader could not reproduce the naira figures from the foreign amounts with the information in the statements, the rate disclosure is not doing its job. The rule's presentation requirement is set out more fully in FRC Rule 8 and naira presentation, and transactions during the year are dealt with in foreign currency at the CBN rate.
Agree the firm's rate policy with the engagement partners now: which table, which column, and what to do on a non-trading day. Put it in the audit methodology, then make the dated rate copy a required document on every Nigerian client's year-end file.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
