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Hello. I’m a bit confused as to how profit/ loss on parent’s investment in overseas subsidiary is treated in statement of profit or loss and other comprehensive income?
Secondly, if you told specifically to calculate translation gain or loss on subsidiary do you have to still calculate the profit/ loss of parent’s investment in subsidiary to be included in GRE. What will be the treatment of translation gain/loss in Statement of financial position if told to calculate it in the question?Hi,
The translation gain on the subsidiary is from the gain/loss on net assets, profit and goodwill. You ignore anything else.
In the exam answers the gain/loss in the group SFP is calculated as a balancing figure in the translation schedule, but I do not do this as I use the shortcut method as seen in the class notes/videos. So therefore we do not see the actual gain/loss on translation in the group SFP that I prepare.
Thanks
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