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Hi Chris,
hope you doing well.
in example 4 on page 34 of the notes, we used the profit figure translated at the current rate for “now” while the actual figure accounted for in the statement of financial position and subsequently in the group retained earnings is based on the balancing figure of 15m.
In that case, are we not ignoring other translation gains or losses, therefore, understating the overall loss on translation of the subsidiary as the recognized profit in the group with respect to the subsidiary is 15M.I’m afraid I don’t understand your question.
In the proforma answer which number are you unsure about?
Hi Stephen,
simply put, why did we use 130/4.3=30.2 as the current profit instead of 15?
thanksThe 15 in the SFP is the cumulative retained earnings plus the cumulative exchange differences. To prove the exchange differences you need just the profit as reported in the P&L.
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