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Hi, I have a few questions in regards to forex and subsidiaries.
1) At which rate (spot, average,etc.) are the non-monetary items translated?
2) Is foreign exchange gain/loss recognised when translating a subsidiary?
3) If recognised, where are they recognised? Is the gain or loss taken through PnL or OCI?I reckon translation difference in the individual accounts is taken through PnL, but for the case with the subsidiary, I’m confused.
Thank you.
1/Monetary/Non-Monetary does not apply. At year end, assets and liabilities including goodwill are re-translated using year end rate. Income and expenses using average/date rate.
2/There is no gain or loss at initial consolidation, it will not be recognised until the subsequent year when assets and liabilities are re-translated.
3/FX gains/losses are held in other components of equity, released on disposal of the assets to PorL.
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