Long-term Loan to a Foreign Subsidiary

Dear tutor ,
I hope to get your answer on some of my questions regarding below question & answer from ACCA’s study hub:

Question:

On 1 January 20X1 Byron acquired 90% of Playa for R 10 million and on the same date made a long term loan to Playa of R2 million. The functional currency of Byron is the dollar and the functional currency of Playa is the Real. Exchange rates are:
1 January 20X1 $1: R0.5
31 December 20X1 $1: R0.6
Required:
Discuss how Byron should account for the investment and loan in its separate and consolidated financial statements for the year ended 31 December 20X1.

Solution:

Separate financial statements

Byron should apply IAS 27 in accounting for its investment in Playa and may elect to measure the subsidiary at cost, using the equity method or in accordance with IFRS 9, at fair value. Regardless of the policy choice, the equity investment is initially recognised at $20 million (10/0.5).

At the year end, depending on the accounting policy chosen the carrying amount of the equity investment may increase by 90% of Playa’s profits in the year (the equity method) or may be remeasured to fair value.

The loan to Playa is recognised at the amount advanced of $4 million (2/0.5). This is a long term monetary item and is retranslated at the exchange rate at the year end to give $3.3 million (2/0.6). The exchange difference of $0.7 million represents a loss to Byron and it is recognised in profit or loss.

At 31 December 20X1 the net investment in Playa is reported at $23.33 million (assuming that the cost model is applied to the equity investment).

Consolidated financial statements

In order to prepare the consolidated financial statements, Playa’s assets, liabilities, income and expenses are translated and consolidated, including the loan payable amount (which is denominated in Playa’s functional currency). Goodwill is calculated and recognised, translated at the closing rate of $1:0.6. The exchange difference on both is recognised in consolidated OCI.

On consolidation the exchange loss recognised in Byron’s separate financial statements on the loan to Playa is transferred from profit or loss to OCI and reported as a net amount with the exchange difference on the translation of Playa. As such the separate company exchange loss of $0.7 million is offset by a $0.7 million exchange gain on the same item that is included in the overall exchange difference on translation of Playa’s financial statements.

Proof working:

Loan payable in Playa’s translated at 1 January 20X1 (2/0.5) = $4 million

Loan payable in Playa’s translated at 31 December 20X1 (2/0.6) = $3.3 million

Results in an exchange gain of $0.7 million (because Playa owes less)

My questions:
1) why the “investment in subsidiary at reporting date” still measured at $20m plus the share of profit instead of $16.67m (R 10m/0.6) plus the share of profit? It is a monetary item ,shouldn’t it supposed to be remeasured at reporting date?

2) In the last graph of the answer, Am I correct to think that :
*Byron records in its P&L : dr P&L exchange loss $0.7m , cr loan receivable $0.7m
*For consolidation, Byron dr OCI $0.7m, cr P&L exchange loss$0.7m
*Playa translates its FS ( for consolidation) & also records : dr loan payable $0.7m , cr OCI $0.7m
* so :
2 OCI amounts of $0.7 m net off
loan receivable & loan payable of $3.3m net off