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Hello.
If a foreign subsidiary sells a non-current asset at a gain, how would we adjust this transaction when computing the “Translation gain/loss on net assets of foreign operations”?Thanks in advance!
Profit on sale of asset recognised in subsidiary’s accounts in local currency, and then, like the rest of the P&L, translated at average rate.
So to paraphrase, we first would have to reverse the gain on sale of non-current asset (net of incremental depreciation) of subsidiary from both closing net assets (Retained earnings) and profit for the year, to be able to arrive at exchange gain/loss of net assets of foreign subsidiary?
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