Consolidating a foreign operation - part 2
You'll learn how to calculate and account for exchange differences when consolidating a foreign subsidiary's net assets and profits.
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In this lesson
- 0:00 Exchange differences in foreign subsidiaries
- 0:36 Translating net assets at acquisition
- 0:51 Worked example: Bill and Ben consolidation
- 2:03 Calculating exchange gains and losses
- 3:07 Allocating differences to group and NCI
- 3:23 Statement of financial position presentation
About this lesson
This video walks you through translating opening net assets at the opening exchange rate, profit or loss at the average rate, and closing net assets at the closing rate—then identifying the balancing exchange gain or loss. You'll see how to apportion these differences between the group and non-controlling interests, and where to present them in the consolidated financial statements. Essential for SBR and Advanced Financial Reporting papers where foreign operation consolidation regularly appears in exam questions.
Duration: 4m
Transcript
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