16. IAS 21 requires an entity:

 a)    To recognise some translation differences in other comprehensive income and accumulate these in a separate component of equity; and

b)    On disposal of a foreign operation, to reclassify the cumulative translation difference for that foreign operation (including, if applicable, gains and losses on related hedges) from equity to profit or loss as part of the gain or loss on disposal.

 17. However, a first-time adopter need not comply with these requirements for cumulative translation differences that existed at the date of transition to IFRSs. If a first-time adopter uses this exemption:

 a)    The cumulative translation differences for all foreign operations are deemed to be zero at the date of transition to IFRSs; and

b)    The gain or loss on a subsequent disposal of any foreign operation shall exclude translation differences that arose before the date of transition to IFRSs and shall include later translation differences.