Chapter 7 - Foreign Currency In Individual Financial Statements Flashcards Preview

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Flashcards in Chapter 7 - Foreign Currency In Individual Financial Statements Deck (4)
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1
Q

What is the definition of functional currency?

A

Functional currency is the currency of the primary economic environment in which an entity operates

2
Q

What are the primary factors of determining functional currency?

A
  • currency influences sales prices

- currency that influences labour, material and other costs

3
Q

What are the secondary factors of determining functional currency?

A
  • currency in which finance is obtained

- currency in which operating receipts are retained

4
Q

What does IAS21 define monetary items as?

A

Assets or liabilities which will lead to the receipt or payment of a determinable number of currency units