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Hi how come in Rose we split the gains and losses of retranslation of net assets and in Ribby question we did not?
in ribby- they have not done this part in the net translation working ( profit on RE $79 /10.5 ex rate. whereas they did in rose question
in exam should we split these to NCI or RE or not, I have got last years Kaplan book and I don’t know if there are any changes to this.
Karen, I’m not aware of any changes. I’ve always split the exchange differences from that “final” working
(opening net assets @ opening rate
+ profit for the year as translated in the PorL
+/- exchange difference
= closing net assets @ closing rate)
That balancing figure of exchange difference is then split in the statement of changes in equity between retained earnings and nci in appropriate proportion
If Kaplan are apparently inconsistent in this then maybe you should ask them why – I’m not privy to their thinking, sorry 🙁
Yes that’s what I thought for some reason in ribby June 2008 they did not take the profit ( retained earnings profit in the net assets cal) into consideration..to work out the gains and losses on re translation on net assets..
If u split it you will still come back with the same answer?
Well, I suppose that you will ie the profit is split in the same proportions as the exchange difference but if you don’t take the retained earnings for the year into the final working, how can you arrive at the exchange difference?
What is the gains and losses on net asset retranslation.? I got here.
Fv of net asset at acq 495/11 45
Profit (299-220) 79/10.5 7.57
Loan 8
Loss on exchange 5.41
Fv of na r/d 566/12 47.16That is for ribby. I am really confused.
Kerri, look again at my post timed at 4.12 pm
That’s the way I have always done this exercise. At least I’m consistent (unlike Kaplan apparently – at least according to you)
I can’t make out anything from the figures in your last post – well, I can, but they’re not making sense to me
45 + 7.57 – 5.41 = 47.16
So where does the 8 loan fit in?
Hi I have a question concerning Ribby.
The exchange difference in the Intragroup loan. Can I adjust the retained earnings of Zian with $2 after translation?. or do i have to adjust the Translation statement with 8 dinarr?
The 8 is the loss I don’t know if we need to retranslate that 8/10.5 that is the unrealised loan. I am still confused. I did rose but didn’t have that problem, even in the pass papers they have not split it to RE and NCI what they have split is the post acqn profits and they have ignored the exchange loss/ gain.
for ribby can you tell me what is the exchange loss/gain on net assets? and the post acqn profits for net assets? (zian)
at your post 4.12pm, you have not taken into account if there are any loans or PURP if there is then that wont balance :
“opening net assets @ opening rate
+ profit for the year as translated in the PorL
+/- exchange difference
= closing net assets @ closing rate)”
Of course it will balance – the balancing figure is the +/- the exchange difference!
So if we take into account the unrealised loans then we do 8/10.5. In the calculation above. Do we ignore the loans in this net asset retranslation? I am still confused 🙁
See the profit for the year is that your post acqn profits. Not retained earnings ( rd-acq)
“Profit for the year” is the this year’s subsidiary adjusted time-apportioned translated profit after tax.
Go back to basic accounting equation from F3!
“a change in net assets can only be attributable to:
Capital introduced + profit – drawings”
Did you tell me that the loan was newly introduced? If you told me, I missed it!
Looking back through your posts, what’s an unrealised loan?
When I ask “What’s an unrealised loan?” I’m expecting an answer that goes a little deeper than “Yes it was unrealised”
! ! ! !
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