Disposal of a foreign operation
You'll learn how to account for the disposal of a foreign operation under IFRS, including the crucial step of reclassifying cumulative exchange differences from equity to profit or loss.
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In this lesson
- 0:00 Disposal of foreign operations overview
- 0:22 Partial disposal proportionate treatment
- 0:32 Worked example disposal calculation
- 1:34 Reclassifying exchange gains to profit
About this lesson
This video covers the key principle that when you sell a foreign subsidiary, any exchange gains or losses previously held in the foreign currency reserve must be reclassified to the gain or loss on disposal, with worked examples showing how to calculate the total profit and treat it in the consolidated financial statements. Essential for SBR and AFM papers where foreign operation disposals commonly appear in exam questions.
Duration: 2m
Transcript
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