Functional currency is the currency that influences sales price, labour, material and other costs of a company’s goods and services. (a) Explain factors that should also be considered to determine the functional currency of a foreign operation. (b) Explain what will happen if a business transaction is denominated in foreign currency but reported in functional currency.
Functional currency is the currency that influences sales price, labour, material and other costs of a company’s goods and services. (a) Explain factors that should also be considered to determine the functional currency of a foreign operation. (b) Explain what will happen if a business transaction is denominated in foreign currency but reported in functional currency.
Chapter10: Measuring Exposure To Exchange Rate Fluctuations
Section: Chapter Questions
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Functional currency is the currency that influences sales price, labour, material and other costs of a company’s goods and services.
(a) Explain factors that should also be considered to determine the functional currency of a foreign operation.
(b) Explain what will happen if a business transaction is denominated in foreign currency but reported in functional currency.
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