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
