Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Translation differences
- This topic has 6 replies, 3 voices, and was last updated 7 years ago by P2-D2.
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- February 25, 2017 at 3:51 pm #374170
Dear Tutor,
I am confused when the foreign currency translation differences are recognised in Retained earnings and when in Other components of equity.
Could you please help me with this issue?Thank you.
February 27, 2017 at 5:54 pm #374605Hi,
Exchange differences on items in the individual accounts are recognised in profit or loss, so when converting from a foreign currency to the functional currency of the entity.
In the group accounts and exchange differences on translation of the overseas subsidiary are recognised in other comprehensive income.
Thanks
February 27, 2017 at 6:06 pm #374609Thank you. I was confused, because there are no translation differences in other components of equity recognised in the question 1 (September/December 15; Bubble group).
February 27, 2017 at 7:29 pm #374628There is a translation reserve, which is the cumulative translation gains/losses since acquisition. I wouldn’t spend time calculating this in the exam however.
Thanks
February 27, 2017 at 8:08 pm #374637Thank you.
March 6, 2017 at 7:42 am #375860Thank you! Some operations with foreign currency do require the calculation of exchange rate differences https://topaccountingtutors.com/ . I could not understand it.
March 6, 2017 at 8:49 pm #376078Yes, it is ridiculously complicated, so ignore it!
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