When translating into the presentation currency the translation difference is recognised:
A) in profit or loss
B) as a separate component of equity
C) in retained earnings
D) as an asset or liability, depending on whether it is a debit or credit balance.

Question

Quizplus · Accepted Answer

According to IFRS, translation differences arising from the conversion of the financial statements of a foreign operation into the presentation currency should be recognized in equity as a separate component of comprehensive income. Specifically, it is recognized in other comprehensive income (OCI) and accumulated in a separate component of equity known as the "translation reserve." The translation reserve is reported separately from retained earnings to ensure that the translation difference does not distort the true performance and financial position of the reporting entity.

When Translating into the Presentation Currency the Translation Difference Is