Flashcards in Chapter 7 - Foreign Currency In Individual Financial Statements Deck (4)
What is the definition of functional currency?
Functional currency is the currency of the primary economic environment in which an entity operates
What are the primary factors of determining functional currency?
- currency influences sales prices
- currency that influences labour, material and other costs
What are the secondary factors of determining functional currency?
- currency in which finance is obtained
- currency in which operating receipts are retained
What does IAS21 define monetary items as?
Assets or liabilities which will lead to the receipt or payment of a determinable number of currency units