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As per IAS 21, any gain or loss on year end re-translation of monetary balances should be recognized in P/L or OCI?
Please help me understand this following para (para 32) of IAS 21:-
Exchange difference arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation (see paragraph 15) shall be recognised in profit or loss in the separate financial statements of the reporting entity or the individual financial statements of the foreign operation, as appropriate. In the financial statements that include the foreign operation and the reporting entity (eg consolidated financial statements when the foreign operation is a subsidiary), such exchange differences shall be recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment in accordance with paragraph 48.
That is a net investment hedge.
Assume you buy a Japanese subsidiary and then lend money to that company.
In the group accounts:
XD on NA of subsidiary go to OCI
XD on loan to subsidiary go to OCI as well.On disposal of subsidiary all XD are recycled to P&L
Prize winner stuff!
Ref. you reply on August 28, 2021 at 8:44 am
But only for individual company accounts!??
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