2.8. Measurement of items denominated in foreign currencies

Items included in the financial statements of the entities within the Group are measured in the currency of the primary economic environment in which the Group operates („functional currency”). The consolidated financial statements are presented in PLN thousands, which is the functional currency of the Group and the presentation currency of the Group’s financial statements.

Transactions expressed in foreign currencies are translated into the functional currency at the exchange rate applicable as at the transaction date.

At the end of the reporting period, monetary assets and liabilities expressed in currencies other than Polish zloty are translated into Polish zlotys using the average exchange rate for a given currency determined by the National Bank of Poland in force at the end of the reporting period. Foreign exchange differences resulting from the translation are recognised as a net trading income or in cases specified in the accounting principles (policy), capitalised in the value of assets. Non-monetary assets and liabilities recognised at historical cost expressed in a foreign currency are disclosed at the historical exchange rate as at the transaction date. Non-monetary assets and liabilities recognised at fair value expressed in a foreign currency are translated at the exchange rate effective at the date of fair value measurement.

Basic currency rates used in the preparation of the present consolidated financial statements as at 31 December 2020 and 31 December 2019 are presented in the below table: