[Keely]

Becker Question –

Hey all,

Can anyone help me out? I was taking a progress test yesterday and it seems like two of the MCQs contradicted each other. The first one says “Under IFRS, which of the following would be included in income from continuing operations on the income statement?” One of the choices is “A large loss from foreign currency translation.” I thought foreign currency translation losses go to OCI (per the PUFER mnemonic). A few questions later, I got a question wanting me to calculate IFRS OCI and one of the bits of information was a foreign currency translation loss. The correct answer included this amount in OCI. So…which is it? Does an IFRS foreign currency translation loss go to the income statement or OCI? I know I’m missing something, I just can’t figure out what it is. Thanks for the help!

BEC: (4/2012) 88
AUD: (5/2012) 91
REG: (8/2012) 82
FAR: (1/2013) 78 🙂

VA CPA #42010

[spongfunk]

Was one a foreign currency translation and one a foreign currency remeasurement gain (loss)?

FAR: 85
AUD: 80
REG: 78
BEC: 82

[musicamor]

SpungeFunk is on the right path. Accounting for the remeasurement of foreign currency financial statements is the same under IFRS and USGAAP. The resulting gain/(loss) is recorded as a component of other comprehensive income; however, normal currency translation adjustments on transactional items like accounts payable, accounts receivable, etc., have impact going into the P&L. It's easy to mix these two up.

Texas CPA - licensed in 2012!!!

[Keely]

Hey guys, thanks for responding. I am just curious why the questions did not specify remeasurement vs. translation, if that's the issue. Both used the word ‘translation' with no other description. I am still really confused and becoming more confused the more I read the book. It seems simple enough, the F in PUFER mnemonic is for “foreign currency translation gains and losses” and in F2 it says this again when discussing translation vs. remeasurement (which goes to the income statement).

BEC: (4/2012) 88
AUD: (5/2012) 91
REG: (8/2012) 82
FAR: (1/2013) 78 🙂

VA CPA #42010

[spongfunk]

If that's the case I honestly think it was a typo and question one should have said remeasurement instead of translation.

FAR: 85
AUD: 80
REG: 78
BEC: 82

[Keely]

Okay, thanks…I'm going to go with that as well 🙂 Maybe I overlooked something, but I don't think so. Those two questions came up side by side in a progress test and I thought it was extremely odd. Thanks!

BEC: (4/2012) 88
AUD: (5/2012) 91
REG: (8/2012) 82
FAR: (1/2013) 78 🙂

VA CPA #42010

[Author]

Replies