Exchange component of a revaluation

Learning objectives

• Isolate the exchange component of a gain or loss on a non-monetary item recognised in other comprehensive income.L2, L3
• Calculate, from the case data, the translated amount or the exchange difference relating to the concept “Exchange component of OCI gains on non-monetary items (30-31)”.L2, L3

Normative references

• IAS 21 §30When a gain or loss on a non-monetary item is recognised in other comprehensive income (for example, a revaluation under IAS 16), any exchange component of that gain or loss is also recognised in other comprehensive income; when it is recognised in profit or loss, the exchange component is recognised in profit or loss.
• IAS 21 §31Other IFRSs require some gains and losses to be recognised in other comprehensive income (for example, some revaluations of property, plant and equipment under IAS 16); for such an asset measured in a foreign currency, the revalued amount is translated at the exchange rate at the date the value is determined (para. 23(c)), and the resulting exchange difference is also recognised in other comprehensive income.

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

3 questions

• Valmer revalues a foreign plot of land expressed in dollars. Case convention: the revaluation gain of 40,000 euros is recognised in other comprehensive income. Its exchange component is 12,000 euros. Where is this exchange component recognised?L2
• Rochet revalues foreign equipment. Case convention: the revaluation is recognised in other comprehensive income. The total revaluation gain, in euros, is {total_change}, of which an exchange component of {change_component}. Calculate the non-exchange component and the total amount recognised in profit or loss.L2
• Which of the following statements about the exchange component of the gain or loss on a non-monetary item are correct? More than one answer.L3