CERTYNEX IFRS ACADEMY

Hérault recognises an impairment on its interest in a foreign subsidiary, with no disposal. The accountant proposes reclassifying part of the cumulative translation differences to profit or loss because of this impairment. What is the consistent position?

No reclassification: a write-down or depreciation without disposal is not a partial disposal.

A reclassification proportionate to the impairment, because it reduces the value of the interest.

A full reclassification of the cumulative amount, the impairment being treated like a total disposal.

A reclassification of the period's differences only, the earlier cumulative amount staying in equity.