Could you please help me to understand what shall happen to currency translation adjustment in the following situation. There was a intercompany quasi-equity loan in euro provided by a European company to a Russian one. Accordingly, all FX differences were booked by the Russian company as CTA inside equity. The loan is now refinanced by the same lender in Russian roubles, which for the Russian company of course means no FX differences anymore.
Question is - what to do with CTA accumulated so far? Should it be:
1. Released as FX gain/loss to income statement since the company has no loans in foreign currency any longer?
2. Kept in equity since it appeared on I/Co loan in foreign currency, no matter that it was later changed to functional currency?
If 2 is correct answer, should this accumulated CTA be released to income statement pro rata at the moment of partial repayment?
Thanks in advance.