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You should record investment at historic cost and any surplus/deficit is exchange differences.
Share capital should always be shown as 9,800mil translated at 9,800:1
Chartered Institute of Management Accountants
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Capital Surplus
Discuss about the capital surplus disclosure in Balance Sheet.
Example:
Company A has made an investment of USD 1mil in Company B in Indonesia in Year 2000. The rate used to converted to was Rp 9,800: USD 1.
The Share capital disclose as Rp 9,800mil in Year 2000
In Year 2001, the Ex rate was Rp 10,000: USD 1, investment of USD 1mil.
Can I record it as :-
Share Capital Rp 9,800mil
Capital Surplus Rp 200mil
INVESTMENT ACCOUNT
Posted by Goh Pei Loong on Thursday 11 March 2010 01:32
COMPANY A, INVESTOR HAS TO RECORD IN THEIR BOOKS FOR INVESTMENT REVALUATION OR FOREX ADJUSTMENTS ACCORDINGLY.