While consolidating your books of accounts sometimes Fx fluctuations pertaining to debt in subsidiary and equity in holding company could create an imbalance and loss in P&L. This happens as debt fluctuation is routed through P/L account whereas Equity Revaluation is routed through B/S.
This anomaly can be sorted and smoothened using Hedge Accounting.
It is a rare situation but impacts many a large companies as we have been observing
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