BP (BP)

Foreign currency transactions

        Foreign currency transactions by Group companies are booked in the functional currency at the exchange rate ruling on the date of transaction, or at the forward rate if hedged by a forward exchange contract. Foreign currency monetary assets and liabilities are translated into the functional currency at

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rates of exchange ruling at the balance sheet date, or at the forward rate. Exchange differences are included in operating profit.

        Assets and liabilities of overseas subsidiary and associated undertakings and joint ventures, including related goodwill, are translated into US dollars at rates of exchange ruling at the balance sheet date. The results and cash flows of overseas subsidiary and associated undertakings and joint ventures are translated into US dollars using average rates of exchange. Exchange adjustments arising when the opening net assets and the profits for the year retained by overseas subsidiary and associated undertakings and joint ventures are translated into US dollars are taken directly to reserves and reported in the statement of total recognized gains and losses. Exchange gains and losses arising on long-term foreign currency borrowings used to finance the Group's foreign currency investments are also dealt with in reserves.

Foreign currency transactions

        Foreign currency transactions by Group companies are booked in the functional currency at the exchange rate ruling on the date of transaction, or at the forward rate if hedged by a forward exchange contract. Foreign currency monetary assets and liabilities are translated into the functional currency at rates of exchange ruling at the balance sheet date, or at the forward rate. Exchange differences are included in operating profit.

        Assets and liabilities of overseas subsidiary and associated undertakings and joint ventures, including related goodwill, are translated into US dollars at rates of exchange ruling at the balance sheet date. The results and cash flows of overseas subsidiary and associated undertakings and joint ventures

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are translated into US dollars using average rates of exchange. Exchange adjustments arising when the opening net assets and the profits for the year retained by overseas subsidiary and associated undertakings and joint ventures are translated into US dollars are taken directly to reserves and reported in the statement of total recognized gains and losses. Exchange gains and losses arising on long-term foreign currency borrowings used to finance the Group's foreign currency investments are also dealt with in reserves.