Points to be achieved: $1\mathrm{.}00$

IAS $21$ The Effects of Changes in Foreign Exchange Rates requires that any exchange differences on translation of a foreign operation's financial statements should be accumulated in a separate component of equity.

On disposal of such a foreign operation, the cumulative amount of exchange differences held in respect of that operation should be:

Please select the right answer.

Reclassified to profit or loss as part of the gain or loss on disposal

Left in a separate component of equity

Transferred to retained earnings

Recognised as an extraordinary item in the statement of profit or loss