bdavi77962

When subsidiary have net monetary asset and currency appreciates, then the parent company gains and vv.

When subsidiary have net monetary liability and currency of subsidiary is appreciating, then its a loss to parent in the income statement.


Actually that's the difference between net income (all current) and net income (temporal)

If there's a net monetary liability and the currency of subsidiary appreciates, then it means it costs the parent company more, thus it is a loss which decreases the net income of the parent company.

I hope this helps.