CAF-6 · Chapter 4 · Question 8 of 15
When an entity's functional currency changes, the entity shall:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Apply the translation procedures to the new functional currency prospectively.
Explanation
Under IAS 21, a change in functional currency is accounted for prospectively from the date of the change.
More IAS 21 Foreign Currency Transactions MCQs
- Q10If an entity translates its results into a presentation currency that is different from its functional currency, assets and liabilities…
- Q11When translating into a presentation currency, income and expenses are generally translated at:
- Q12A foreign exchange gain on a non-monetary item (like a revalued building) where the gain itself is recognized in OCI, should have its…
- Q13Which item is NOT a monetary item?
- Q14The currency that mainly influences labor, material, and other costs is considered a: