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Dear tutor,
I face some problem relating to this standard,in past yr qs dec2006,the entity have a foreign subsi and subsi hav a investment at the opening date 28 million euro,and closing bal 24 m euro,and this 2 figure translate at opening and closing exchange rate,the model answer stated that bcos its a non monetary item any currency diff is not separated if recognised in profit or loss then whole amt go P or L if regconised in equity then all go equity,but in the jun 2009 qs aron the entity also have a foreign subsi and has a debt this time the model answer stated that FV changes and exchange rate diff must be separated,changes in FV must go to OCI changes in exchange rate go to P n L,why its not consistent?then the Dec09 qs 1 Grange also hv this similar situation, model answer stated all diff go to OCI(treatment same as dec 06 answer)wht should I do if I face this kind of qs in this coming exam?I seem to remember reading recently that exdiffs go through Comprehensive Income and are, in addition, shown as adjustments to the retained earnings.
I could be wrong, and sorry not to be more definitive
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Dear Mike,
i have a little query that what if an aseet’s recoverable amount is higher than its carrying value in fuctional currency of the subsidiary but when we translate the recoverable amount in presentation currency it gives the lessor recoverable amount to compare with carrying amount so now will impairement will be recorded or not or what will be the entries??
thanksWow! There’s a new one! I have never ever had that question before!
And, because of that fact, I have never thought about it before either.
If we translate the recoverable amount using closing rate, why are we not similarly translating carrying value at closing rate?
It would still show a higher recoverable amount, whether translated or not translated, so long as the same rate is applied to both amounts
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first of all we dont apply closing rate to the carrying value…its the rate when buying an asset….check the ribby case in adj # 3 where using a rate when that property was bought.
Carrying amount D40m/10*=$4m lessdep$4m/20years =$3.8m
Recoverable amount D36/12** =$3.0m
Impairement loss =$(0.8)m
*transaction rate
**closing rate
and this adj make me think in this way that WHAT IF
Recoverable amount D39/20 or even if its 40/20 then gives 2 or 1.95 so the lessor recoverable amount….now what?
i mean in functional there is no impairement but when translating and the rate changes that much so now what…i applied 20 as a closing rate…can someone help me related ifrs 10 11 and 13?as i heard these topics are included in p2 sylbs and are examinable for june 2012 exam
kindly help me related the topics in detail thankxsadaf, if you were to apply the allowed method of converting everything at closing rate, you wouldn’t have this problem!
miradnan, there is , at the front of the Kaplan exam kit, a section on current issues. That section includes brief commentaries on IFRS9 – IFRS13 as well as some IAS adjustments like IAS 19
I do not have Kaplan kit we only get BPP in this country, anyone with the kit pls scan & email me – simoneacca@live.com
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