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1st situation – The gain or loss arising on the disposal also includes the amounts that had previously been recognised in other comprehensive income in relation to that subsidiary, if those amounts are required to be reclassified to profit or loss upon disposal.
Amounts that are not required to be reclassified to profit or loss upon disposal of the related assets or liabilities shall be transferred directly to retained earnings.
I don’t really understand how does that work?
How the first situation could give effect gain or loss on disposal?
I suppose it means XD on foreign subs or cash flow hedges or gains on FVOCI loan assets – as these are the items that are recycled.
Sounds too fiddly for an exam question.