Does having assets in a highly inflationary economy via a subsidiary , when consolidated after adjusting for local inflation and translated back in current exchange rate always result in an unrealized gain (which implies having assets in highly inflationary environments is good)?
Having assets exposed to a country with high inflation would mean that currency is depreciating. So the value of the assets should depreciate, not appreciate.
Yep, but by implementing applicable accounting policies it might be avoided, so there is not unique rule. Also it may be a net liability exposure with opposite outcome in consolidated BS.
The purchasing power ofcourse decreases during the times of inflation. But is it appropriate to restate the values of Non Monetary Assets (hiking up the values of even those carried at historical cost) for changes in the inflation rate?
There are GAAPs both IFRS and US GAAPS related to reporting in high inflation environment with stated what inflation rate is considered as high. Therefore, standards differ with approach of BS items adjustment for inflation. The inflation adjustment is applied on various asset/liability positions. Land is just part of PPE or Inventory in BS, thus standards referred to reporting and consolidation in high inflation environment also apply to land position in subsidiary BS.
Agree.