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MikeLittle.
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Nizar
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When translating the closing balance of subsudiary’s SOFP from foreign to functional currency, the part “profit for the year”, i got a loss of $2008, which, have a profit of 1500(in other currency).
the part profit for the year should be the balancing figure right, is it possible to obtain such result?
there’s no suggested solution, as this is a tutorial question given by my tutor.
MikeLittle
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IF I have understood you correctly, I would translate the subsidiary’s Income Statement according to “the rules”, put the derived figure into the equation “opening net assets @ opening rate + profit for the year as translated – closing net assets @ closing rate = exchange gain / loss”
Try that
Nizar
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erm, i got it.
anyway, how do we establish whether the question is asking for “translating from foreign to functional currency” or “translating from functional to presentation currency” ?
MikeLittle
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Most unlikely that he will ask that but, if he does, he will give you both currency exchange rates
Nizar
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