Question: PAS 2 1 provides that an entity may present its financial statements in any currency even different from its functional currency. When the company translates

PAS

21

provides that an entity may present its financial statements in any currency even different from its functional currency. When the company translates its financial statements from its functional currency to its selected presentation currency, how shall the exchange differences arising from the translation be recognized?

Group of answer choices

It shall be recognized in profit or loss.

It shall be recognized in other comprehensive income with reclassification adjustment to profit or loss if realized.

It shall be recognized in other comprehensive income without reclassification adjustment and reclassified directly to retained earnings if realized.

It shall be recognized directly to retained earnings.

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