In the multinational operations reading it says foreign exchange gains and losses go to income statement as gain or loss for gaap and ifrs.
In the inter corporate investment reading it says available for sale securities foreign exchange gains losses go to OCI for gaap.
what is going on?
my from understanding,
For multinational options reading, the gains/losses is either on the Income Statement or on the Balance Sheet depending on temporal or current rate method.
For security sales of inter-corporate investments, is the security accounting by financial investment, equity or consolidation?
FX diff. G/L are recorded through P/L in ordinary commercial (trading) activities. It is also the case with the speculative activities.
Net foreign investment FX differences position into foreign subsidiary is recorded through OCI under current rate method.
FX exch. differences from investment into foreign subsidiary are recorded through P/L under temporal method.
I’m glad if I helped a bit.
As others have noted, in multinational ops currency translation, where the G/L is recorded depends on the method of translation (current rate vs temporal) which is based on how integrated the sub is with the parent or not. Your question is more around the difference between intercorp investments and multinational ops - intercorp investments includes AFS securities (unrealized G/L in OCI) while multinational ops is focused specifically on subsidiaries in international markets that would consolidate into parent (so >50% ownership plus ability to influence). So different views on somewhat related topics