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Within the example of translated SFP question in SBR, I found that there wasn’t no adjustment for goodwill nor its recognition in the SFP.
Why good will is excluded from the presentation of translated group SFP?Second, in the same example if the balance is calculated to get the figure for post acquisition RE, then where should the Current Exchange Difference be reflected in? I know it is a part of OCE thus OCI but in the example there was no recognition of the exchange of difference in the equity section of translated group SFP.
I would be more than glad if you could shed some light on this. Thanks in advance.
1. When you translate the SFP, there will be no goodwill – there is none in the local currency accounts … so there will be none in the translated accounts.
2. The goodwill only appears in the CSFP.
3. Technically XD should be in a separate reserve (not RE) in the CSFP. When it used to be come up in the exam in the previous syllabus, I would tell students not to worry about it.
4. Remember that you will not be asked to do a full consolidation in the exam – hence I wouldn’t spend time on reserves. (I assume you are sitting in June 23).Hi, thx for your kind reply.
Now I just realized that the question of example 3 in the foreign currency section was asking for a translated SFP of the subsidiary, not CSFP. It’s so pity that I was misinterpreting the question until now
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