On disposal of a Non-Integral Foreign Operation, the accumulated FCTR is:
ARetained as a separate reserve
BRecognised in P&L as part of gain/loss on disposal
CTransferred to General Reserve
DCapitalised
Answer & Solution
Correct answer: B. Recognised in P&L as part of gain/loss on disposal
1. Step 1: Per AS 11, on disposal of NIFO, FCTR is reclassified to P&L as part of gain/loss on disposal.
2. Step 2: This is the only time accumulated FCTR is recycled.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 15 "Accounting for Branches including Foreign Branches"_