The parent Savoy granted its foreign subsidiary a loan of 1,000,000, valued at 920,000 at inception (0.92 euro per 1 dollar). The loan is part of the net investment. At the closing date the rate is 0.95 euro. Calculate the exchange difference and its recognition in the parent's separate statements, then in the consolidated statements.
- Loan in dollars
- 1,000,000
- Carrying amount of the loan in euros before translation
- 920,000