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Subject: the USD denominated dividend liability the USD denominated dividend liabilityIn accordance with IAS 21.16 the USD denominated dividend liability is a monetary item. Accordingly IAS 21.28 requires that foreign exchange differences on monetary items be recorded in the income statement. Application of IAS 21.28 would therefore result in the dividend having an income statement impact. Ostensibly this seems to contradict the approach taken for the unwinding of the discount (which is recorded in equity). Further it could be argued that IAS 21.30 (by analogy would seem to allow the foreign exchange differences to follow the discount unwind into equity) and IAS 21.31 (since IAS 1 seems to require transactions with equity holders acting in their capacity as equity holders to be recorded solely in equity) indicate that any foreign exchange differences arising on the dividend should be recorded in equity along with the unwinding of the discount.
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