ACCA - Strategic Business Leader (P2)

During the year ended 30 November 20X2, Coate acquired an overseas subsidiary whose financial statements are prepared in a different currency to Coate. The amounts reported in the consolidated statement of cash flows included the effect of changes in foreign exchange rates arising on the retranslation of its overseas operations. Additionally, the group's consolidated statement of cash flows reported as a loss the effect of foreign exchange rate changes on cash and cash equivalents as Coate held some foreign currency of its own denominated in cash.

Discuss how the above events should be accounted for in the individual or, as appropriate, the consolidated financial statements of Coate.