Functional Currency
IAS 21 outlines how to account for the transactions and operations in foreign currency in the financial statements of an entity. It also prescribes how to translate foreign currency financial statements into a presentation currency. An entity is required to determine a functional currency based on its primary economic environment which it operates and foreign currency transactions are recorded using the spot conversion rate on the date of transaction.
The principal issues of IAS 21 are which exchange rates should be used and how to the effects of changes to be recorded in the financial statements.
Key Definitions
Functional Currency is the currency of the primary economic environment in which the entity operates and Presentation Currency
…show more content…
Assuming there are no other transactions between them, there would be no exchange differences to report in the consolidated financial statement.
However, in another example, if Entity A’s functional currency is SGD and Entity B’s is GBP. On 30 Apr 2009, A bought equipment from B at GBP 10 million when the exchange rate is 1 GBP = 2 SGD, hence the unpaid liability will be recorded as SGD 20 million.
At A’s financial year ended 31 Dec 2009, the closing exchange rate was 1 GBP = 1.6 SGD, hence the unpaid liability will be recorded as SGD 16 million. Therefore, there will be an exchange gain of SGD 4 million.
IAS 21 will require the entity to disclose the differences recognized in consolidated income statement and state the differences of the FX rates at the beginning and end of a period. The rate in which is often used approximates around the actual rate at the date of the transaction – usually an average weekly rate or a monthly rate might be used for all transactions in each foreign currency occurring during that period. However, if exchange rates fluctuate significantly, the usage of the average rate for a period would become
Pt1420 Unit 8 Assignment 2
1417 Words | 6 Pages8 Nov. 2015. . . I used this source when writing the start of my booklet. When I evaluated my source i determined that the currency scored a 4 this is due to the publication being fairly recent as it was made in 2013 and provides a full date. I found this Information extremely useful when writing my booklet which gave it a 5 for relevance.
The Tanner Humanities Center Video Of Neil Degrasse Tyson's Currency
520 Words | 3 PagesIn the Tanner Humanities Center video of Neil deGrasse Tyson, Tyson discusses the problems with the American currency. His platform is that there should be scientists like him on the U.S currency, so they could be valued as people who contributed to who we are as a nation. While watching the video, I enjoyed his humor , and the way he used logic to explain how the currency should be labeled. Although, I disagree with Tyson’s view that scientists should be the ones on the currency, I believe that the currency should be changed. It should not only have scientists, but some politicians, artists, etc.
Commentary On Nickel And Dimed
374 Words | 2 PagesMy article deals with the study of society and social interaction of the Middle Class and how they survived on a Nickel and Dimed. In our text (n) 2, (pg. 42, paragraph 2) the journalist Barbara Ehrenreich brought the two stories together by research, that it is, impossible to make it on minimum wage work. The journalist observed in her study the mindset of the working Middle Class people, their persistence to make ends meet, to take care of their household, family and the will to make thing change. The “Middle Class” an aimless expression applied to those who is not on the system of welfare. In the United States certain development changed the past three decades, due to after World War II, the benefits of growth, and money making flow to
Aucoin's Democratic Reform In Canada
1010 Words | 5 PagesAucoin Essay Our new prime minister of Canada, Justin Trudeau has given a set of democratic reforms to minister LeBlanc who has been given the task to deal with the problems regarding parliament issues. Our prime minister has promised Canadians real change to the way the government governs by committing to invest in Canada’s growing economy, to strengthen the middle-class, to help the hard working class, to provide help to those whom need it most compared to those who do not need it, and to invest in the public to create jobs, economic growth and a broad-based expansion. Aucoin’s democratic reform proposal tests for good reforms that include clear objectives, no loopholes, clear enforcement mechanism, entrench the house of commons power, fixed
The Solution Essay: The Ever Changing Penny
558 Words | 3 PagesI emptied my pockets. Sure enough, they were full of useless junk. Upon closer inspection, in the depths of my front pocket, I found a single copper coin. Just enough to purchase one small piece of candy. My craving could finally be satisfied.
Metcash Essay
617 Words | 3 PagesTHE ORGANIZATION Metcash Limited is one of Australia’s leading wholesale distribution and marketing company and is listed among ASX top 100 companies (Metcash 2017). Its customers, suppliers and employees are the important stakeholders of the company. The company generates most of its income from the Grocery, Liquor and Tobacco product wholesaling in Australia industry.
How Does Andrew Jackson Deserve To Be On US Currency
1639 Words | 7 PagesAndrew Jackson Andrew Jackson can be described as a savior and a devil. He was the seventh president and made very controversial actions. James Parton states that Jackson was, “a patriot and a traitor” (Parton,1888). This shows that Jackson is an enigma, according to James Parton’s article about his life. This was concluded even though he was a war hero during the war of 1812.
Token Economy Research Paper
507 Words | 3 PagesHow effective is it? Several researches have been conducted to examine the effectiveness of token economy rewards system in reducing disruptive behaviors whether for the whole school and/ or classroom or for a single student for example: A: Token Economy for the whole school and/or classroom - Wheatley, Charlton, Sanders, & Smith (2009) were concerned about the increasing disruptive behaviors in the common areas such as the cafeterias and playgrounds in school. The study was conducted to target inappropriate behavior such as running and littering. School administrators as well as teachers were trained how to provide Praise Notes as a reward to students who perform a positive behavior.
Wgu Audit Task
529 Words | 3 PagesClients must keep records and books of accounts including cash book, sales ledger, purchases ledger and general ledger. Supporting documents such as invoices, bank statements, pay-in slips, cheque butts, and receipts for payments, payroll records and copies of receipts issued should be retained. A valuation of the stock in trade should be made at the end of the accounting period and the appropriate records maintained. Company should record sufficient to explain each transaction and to enable a true and fair profit & loss account and balance sheet to be prepared. At the end of the accounting period, a physical stock-take should be made to ascertain the quantity and the cost of the stock in hand or the cost of work in progress statements and
Acc 201 Final Project Part 1 Accounting Cycle
1187 Words | 5 PagesThe eighth step involves recording closing entries. Closing entries purpose is to end the accounting period to data in the temporary accounts to the ever-lasting income statement accounts and balance sheet. Transferring the balances of the nominal or temporary accounts to owner equity or retained earnings accounts is used because this account only affect one accounting time frame (edunote (2016). The ninth step is “Preparing a close trial balance “.
Target Corporation Executive Summary
477 Words | 2 PagesThere are essential common concepts between GAAP and IFRS including both require parent companies to consolidate financial statements that include subsidiary companies, in the consolidated financial statements the parent company has to report 100% of subsidiaries assets, liabilities, revenue, expenses, gains and losses and the parent company is in control as long as it assumes more than 50% possession of outstanding common stock (James, 2010). Also, both require that goodwill be identified on the combined financial statements if the procurement cost surpasses the fair market value of the subsidiaries recognizable assets and goodwill is remunerated (James,
Fractional Reserve Banking
1113 Words | 5 Pages6.1.6 1. The centerpiece of the U.S. economy is its banking system. A. Banks in the U.S. practice fractional reserve banking. Explain what this means. (4 points)
Informative Speech: Bitcoin And Other Cryptocurrency
835 Words | 4 PagesSpecific Purpose: The purpose of my speech is to inform the audience of Bitcoin and other cryptocurrencies. Thesis: Every year since 2009 Bitcoin has been growing its own economy without any government regulations. Introduction I. Attention Getter:
Accounting Information System Literature Review
1372 Words | 6 PagesParticularly well experiences accountants work with AIS means to check the high-level accuracy of company financial transactions and to keep the records in safety manner. To make financial statement easiest way and easy to understand for all of them. AIS is one of the real-time application processes. The Data will be included in the AIS; it depends on the Nature of the Business. It consists of Customer billing statements, Sales orders, purchase Requisitions, Sales analysis reports, Register checking, Vendor invoices, general ideas, payroll information, timekeeping and inventory data, tax information.
Roles Of Money In Macroeconomics Essay
1772 Words | 8 PagesROLE OF MONEY IN MACROECONOMICS 1. Introduction Money can be seen as the medium of exchange which is acceptable while transaction is being undertaken between two parties. Some of the common forms of money are: - Commodity money: This is when the value of the good represents its value in terms of money like gold or silver. - Fiat money: This is when the value of the good is less than the value it represents - Bank money: It is the accounting credits that can be used by the depositor Money serves a variety of crucial functions in the economy and this is why it has gained an unparalleled influence in the matters of economy at micro as well as macro levels. Some of the features of money that make it so important for any economy are as follows:
More about Functional Currency
Pt1420 Unit 8 Assignment 2
1417 Words | 6 PagesThe Tanner Humanities Center Video Of Neil Degrasse Tyson's Currency
520 Words | 3 PagesCommentary On Nickel And Dimed
374 Words | 2 PagesAucoin's Democratic Reform In Canada
1010 Words | 5 PagesThe Solution Essay: The Ever Changing Penny
558 Words | 3 PagesMetcash Essay
617 Words | 3 PagesHow Does Andrew Jackson Deserve To Be On US Currency
1639 Words | 7 PagesToken Economy Research Paper
507 Words | 3 PagesWgu Audit Task
529 Words | 3 PagesAcc 201 Final Project Part 1 Accounting Cycle
1187 Words | 5 PagesTarget Corporation Executive Summary
477 Words | 2 PagesFractional Reserve Banking
1113 Words | 5 PagesInformative Speech: Bitcoin And Other Cryptocurrency
835 Words | 4 PagesAccounting Information System Literature Review
1372 Words | 6 PagesRoles Of Money In Macroeconomics Essay
1772 Words | 8 Pages