alleryStart learning →Why are translation differences kept out of profit or loss?
AThey are always immaterial in size
BThey are taxed separately anyway
CThey arise only in consolidated accounts
DRate moves barely affect operating cash flows
Answer & Solution
Correct answer: D. Rate moves barely affect operating cash flows
Rate changes barely affect present and future cash flows from the foreign operation's operations, so they are held in equity.
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Related questions
A lends to foreign subsidiary B, no settlement planned. The loan is part of:In assessing exchangeability, which is considered?Does a normal administrative delay make a currency not exchangeable?If a currency is not exchangeable, what must the entity do?How does Ind AS 21 define an exchange rate?An exchange difference arises from translating currency units at what?What are the two principal issues in Ind AS 21?Which standard covers presenting foreign currency cash flows?