Write-down and disposal

Learning objectives

• Distinguish a write-down of the carrying amount of a foreign operation from a disposal (no reclassification).L4

Normative references

• IAS 21 §49A disposal or partial disposal may occur through sale, liquidation, repayment of share capital or abandonment of all, or part of, that entity; a write-down of the carrying amount of a foreign operation, either because of its own losses or because of an impairment recognised by the investor, does not constitute a partial disposal and does not lead to any reclassification to profit or loss.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• 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?L4