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I am struggling to grasp how to calculate foreign subsidiaries exchange gains and losses, I’m using a BPP text book but cant understand it. Then I tried some lectures on open tuition website which made me more confused because it used a completely different method.
Please could you advise on how I should proceed?
Also is it correct to translate a subsidary’s equity at the historic rate?
Many Thanks in advance!
The BPP way, from memory, translates equity as at date of acquisition at historic rate. I believe that “my way” is considerably easier than the BPP method (translate everything at closing rate) but if you need a lot of back-up support or multiple examples then I’m sorry to say that I have to recommend the BPP method
It’s a pity because my way is really very straight forward
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