FRS 102 and OCI for Unrealised Gain presentation
BaiLin
Registered Posts: 3
Please advise on the following:
A client has a limited company and he is the sole shareholder and director. The limited company has only one activity that is the director (i.e. the client) lend out 200,000 euros to an individual in France. The annual accounts has been prepared under FRS 102 with simple P/L and B/S in the past 10 years, and the Unrealised gain (derived from revaluation at the year end due to foreign exchange rate) has been shown on the face of P/L, but removed when calculate Corporation Tax, so that the amount of Unrealised Gain has no impact on tax liability(so all correct).
Now one of my colleague believes that this Unrealised Gain should be shown on OCI with Deferred tax on P/L too rather than on B/S as Revaluation Reserve which was my suggestion. I searched on the FRS 102 Standard and it did state that the foreign exchange gain should be on OCI (Is it for a little more complex company rather than my client?), I am thinking whether the OCI treatment for such simple limited company as it only has one loan and no any other transactions to be practical and could it be just acceptable to present the Unrealised Gain as Revaluation Reserve on the face on B/S?
Your inputs and ideas are most appreciated.
A client has a limited company and he is the sole shareholder and director. The limited company has only one activity that is the director (i.e. the client) lend out 200,000 euros to an individual in France. The annual accounts has been prepared under FRS 102 with simple P/L and B/S in the past 10 years, and the Unrealised gain (derived from revaluation at the year end due to foreign exchange rate) has been shown on the face of P/L, but removed when calculate Corporation Tax, so that the amount of Unrealised Gain has no impact on tax liability(so all correct).
Now one of my colleague believes that this Unrealised Gain should be shown on OCI with Deferred tax on P/L too rather than on B/S as Revaluation Reserve which was my suggestion. I searched on the FRS 102 Standard and it did state that the foreign exchange gain should be on OCI (Is it for a little more complex company rather than my client?), I am thinking whether the OCI treatment for such simple limited company as it only has one loan and no any other transactions to be practical and could it be just acceptable to present the Unrealised Gain as Revaluation Reserve on the face on B/S?
Your inputs and ideas are most appreciated.
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