Foreign currency translation reserve
I would like your views on this one.
A ltd (dollar ac) holds 100% of B ltd (dollar) who holds 100% of Z (Euro ac). A company has approached A, to buy Z. However if A was to lose control, on disposal, the cumulative amount of exchange differences that was recognised in equity is reclassified to income statement.
If Z functional currency were to be changed from Euro to Dollar, what impact would there be on A ltd and the Translation reserve balance carried forward from last year?