7 - Foreign currency in individual financial statements.

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Domanda English Risposta English
Functional currency definition.
IAS 21: The effects of changes in foreign exchange rates.
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'the currency of the primary economic environment where an entity operates'
IAS 21
6 factors used to determine a functional currency are as follows:
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Financing | Receipts | Purchases and costs | Sale prices | Competitive forces. | Regulations
FR-PS-CR
A subsidiary that operates with LITTLE AUTONOMY will most likely have the same functional currency as ...?
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as its parent.
Overseas transactions rules.
5
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1. Initial transaction. 2. If settled - translate the settlement to functional currency using spot rate. 3. If unsettled - treatment depends on if the overseas item is monetary.
4. If monetary - Retranslate at the closing rate of exchange. 5. In non-monetary - Do not retranslate. However, if held under a FV model, the FV will need to be translated when determined.
Monetary items examples.
3
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Receivables, payables, loans.
Non-monetary items examples.
2
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PPE, inventories
intangible assets
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English

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