Foreign Exchange- Assets and Liabilities

If you have an asset or liability that you don't expect to settle quickly, can the revaluation be BS

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Significant interompany loans that are required to be translated and will not be settled within 1 or 2 years can the revaluation be shown in the balance sheet

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By johngroganjga
19th Apr 2017 12:03

ALL monetary assets and liabilities denominated in foreign currencies have to be translated at each balance sheet date. If that is what you mean by "can the revaluation be shown in the balance sheet" the answer is not only can it be but it must be.

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Replying to johngroganjga:
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By kaajal
19th Apr 2017 12:12

Agreed that the balance sheet should be translated but it is the revaluation part I am asking. Can I take the difference being the exchange gain/loss into a separate reserve on the balance sheet rather straight to PL to avoid the huge exchange gain

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Replying to kaajal:
By johngroganjga
20th Apr 2017 13:21

There would be no point in a requirement to translate at a current rate if doing so had no impact on reported earnings or net assets.

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By Democratus
20th Apr 2017 15:41

If the loans are inter Co then this revaluation should reflect in hold Co the effect of lending currency to a GBP subsidiary, i.e. even if nothing else happens there is exposure to FX risk, either up or down, which is reflected in the P&L.

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