Dear Ms Buchanan
The Effect of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation
The ASB’s principal comments on Draft Technical Correction 1 are set out below. More detailed concerns are in the Appendix.
Amendment to IAS 21
1. We agree that there is no logical reason for restricting amounts that qualify for inclusion in the net investment in a foreign operation to exclude amounts in a currency other than a functional currency of either the lender or borrower. Nor is there any reason to exclude loans and other balances between a fellow subsidiary and the foreign operation. Accordingly we agree with the technical rationale for the proposed amendment.
See full Letter, in pdf format.
Posts
