Foreign exchange gain or loss

[sam]

hi everyone,
I have one question regarding consolidated FS.
Here we go!

Parent company given loan to foreign subsidiary in foreign currency. In standalone FS of parent, on revaluation of foreign currency loan receivable at each reporting date, there was FX gain or loss on such intercompany loan receivable. There was no such FX gain or loss in subsidiary standalone FS, as loan payable to parent is in presentation currency of subsidiary, so no revaluation needed. For the purpose of consolidation, foreign subsidiary FS were translated into presentation currency of parent company.

Then in consolidated FS, we will eliminate inter company loan between group companies.

Now my question is that what is the treatment of FX gain or loss (reported in standalone PNL of parent) in consolidated FS. Please give reference of relevant IAS/IFRS.

[Marek Muc]

Hi, see the section on intragroup balances in IAS 21

[sam]

Hi, see the section on intragroup balances in IAS 21

Means in the above example, FX gain will be recorded in consolidated PNL and will not be eliminated from standalone parent PNL. Please confirm my understanding.

[Marek Muc]

Yes, unless it's part of the investment in subsidiary

[sam]

Yes, unless it's part of the investment in subsidiary

thanks sir. So much respect for you sir