Hi,
Should we calculate NCI on translation differences arising on foreign subsidiaries?
Translation difference on consolidation
Re: Translation difference on consolidation
Hello,
Not sure if I understand your question. But what you should do when you translate a foreign subsidiary into the presentation currency is as follows:
STEP 1:
1) translate assets and liabilities (excluding goodwill) at the reporting date's rate
2) translate P&L at the period's average rate (or at the rates prevailing at each transaction's date)
3) translate all remaining B/S items at historical rates (IAS 21 doesn't tell you so, but I reckon this is what most companies do)
STEP 2:
Determine the exchange differences (excluding goodwill)
STEP 3:
Allocate the exchange differences (excluding goodwill) to the group and to the NCI
STEP 4:
Calculate and add the exchange differences due to goodwill
Hope this helps.
Not sure if I understand your question. But what you should do when you translate a foreign subsidiary into the presentation currency is as follows:
STEP 1:
1) translate assets and liabilities (excluding goodwill) at the reporting date's rate
2) translate P&L at the period's average rate (or at the rates prevailing at each transaction's date)
3) translate all remaining B/S items at historical rates (IAS 21 doesn't tell you so, but I reckon this is what most companies do)
STEP 2:
Determine the exchange differences (excluding goodwill)
STEP 3:
Allocate the exchange differences (excluding goodwill) to the group and to the NCI
STEP 4:
Calculate and add the exchange differences due to goodwill
Hope this helps.