This free, guided checker walks your finance team through the key decision points for IAS 21 Disposal of Foreign Operation. Answer a few questions to see the likely treatment and the evidence to document.
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This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
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A foreign operation is an entity whose activities are based or conducted in a foreign country, including subsidiaries, branches, associates, or joint arrangements with functional currency different from the group's presentation currency.
No IAS 21.48 reclassification arises for the period; continue accumulating CTA in equity and monitor planned divestitures.
Official guidance: IFRS issued standards
Partial disposal that retains control does not trigger full reclassification; loss of control, significant influence, or joint control triggers reclassification of related cumulative translation differences.
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Official guidance: IFRS issued standards
IAS 21.48 requires reclassification of the cumulative translation difference accumulated in equity to profit or loss when the foreign operation is disposed of; include amounts previously recognized in OCI.
Post the IAS 21.48 reclassification: move the operation's cumulative translation difference from equity into the disposal gain or loss at the disposal date.
Official guidance: IFRS issued standards
IAS 21.48B requires that on partial disposal of a subsidiary that includes a foreign operation, the proportionate share of the cumulative exchange differences recognised in OCI is reattributed to NCI. Nothing is recycled to profit or loss because IFRS 10.23 treats ownership changes without loss of control as equity transactions; recycling is reserved for the IAS 21.48A disposal events.
Reattribute the proportionate share of the translation reserve to NCI within equity, with no profit or loss recycling, per IAS 21.48B.
Official guidance: IFRS issued standards
IAS 21.48 includes reclassified translation differences in the gain or loss on disposal; partial disposals use proportionate amounts consistent with IFRS 10 or IAS 28 treatment.
Recompute the disposal gain or loss including the reclassified cumulative translation difference required by IAS 21.48.
Official guidance: IFRS issued standards
Translation differences recognised in OCI may carry related deferred tax, including tax on taxable temporary differences associated with the investment in the foreign operation (IAS 12.39-40). On disposal, reclassify or release that tax consistently with the translation reserve so the OCI reconciliation and the IAS 12.81(ab) tax-per-component disclosure remain coherent.
Trace deferred tax recognised in OCI on translation differences and reclassify it with the reserve per IAS 12.61A.
Official guidance: IFRS issued standards
IFRS 5.33 requires results of discontinued operations including associated reclassification adjustments to be presented separately in the statement of profit or loss.
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Official guidance: IFRS issued standards
IAS 21.39 requires assets and liabilities of the foreign operation to be translated at closing rate until disposal date; disposal proceeds translated at spot rate on transaction date.
Retranslate proceeds at the disposal-date spot rate (IAS 21.21) and net assets at rates through disposal (IAS 21.39) before finalising the gain or loss.
Official guidance: IFRS issued standards
Loss of significant influence or joint control triggers reclassification of the investor's share of cumulative translation difference to profit or loss on disposal of the foreign operation.
Reclassify the investor's share of cumulative translation differences on loss of significant influence or joint control (IAS 21.48A; IAS 28.22), or the proportionate share for a partial disposal (IAS 21.48C).
Official guidance: IFRS issued standards
Disposal may trigger capital gains tax, withholding on dividends, or recapture taxes; current tax follows profit or loss recognition of disposal gain or loss.
Compute and record current tax on the disposal gain and any withholding or repatriation taxes in the disposal period (IAS 12.58).
Official guidance: IFRS issued standards
IAS 21.52(b) requires a reconciliation of net exchange differences recognised in OCI, and IAS 1.92 requires disclosure of reclassification adjustments by component of OCI. Disclose the income tax relating to each OCI component under IAS 12.81(ab), and present discontinued-operation amounts separately where IFRS 5.33 applies.
Disposal accounting is complete: CTA reclassified or reattributed per IAS 21.48-48B with IAS 21.52 disclosures in place. Draft the IAS 21.52(b) reconciliation, the IAS 1.92 reclassification adjustment, and the IAS 12.81(ab) tax disclosures before sign-off.
Official guidance: IFRS issued standards
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