When translating the financial statements of a foreign operation to presentation currency,IAS 21 requires any gain or loss on translation of the financial statements to be:
A)recognised as a revenue or expense in the statement of comprehensive income.
B)transferred to a reserve in the equity section of the statement of financial position.
C)deferred and amortised over a period not greater than 20 years.
D)written off against the non-monetary assets of the foreign operation with any balance remaining recognised as a revenue or expense in the period.

Question

Quizplus · Accepted Answer

IAS 21 requires that any gain or loss on translation of the financial statements of a foreign operation be recognized in other comprehensive income and accumulated in a separate component of equity, typically referred to as a foreign currency translation reserve.

When Translating the Financial Statements of a Foreign Operation to Presentation