Functional currency


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Functional currency

As defined by FASB No. 52, an affiliate's functional currency is the currency of the primary economic environment in which the affiliate generates and expends cash.
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The Norwegian Krone weakened by 8 percent against the Euro and US Dollar during the third quarter of 2015 resulting in a foreign currency exchange loss on a Norwegian Krone denominated intercompany loan balance with a subsidiary using a functional currency of the Euro and on settled foreign currency hedges.
36,631 functional currency to presentation currency Total comprehensive
Accounting adjustments in order to reflect the modification of the functional currency of two of the Company's subsidiaries;
985-3 govern the tax accounting of items from a qualified business unit (QBU) that uses a functional currency that becomes "hyperinflationary" for U.
Normal intercompany accounts will generate a gain or loss that is ordinarily reflected on the books of the subsidiary operating in a functional currency other than the reporting currency of the parent company.
5% at the end of 3Q11 relative to the end of 2Q11), as it uses the ruble as a functional currency and had a significant cash balance ($688 mln) at the end of 2Q11, much of which is likely to be in dollars.
The key when translating the accounts of foreign subsidiaries for consolidation is to identify the functional currency of the subsidiary - that of the primary economic environment in which it operates.
Each entity keeps its books and records in its functional currency, which is defined to be the currency of the primary economic environment in which it operates.
It says that most large resources firms such as BHP Billiton, Fortescue Metals Group, and Woodside Petroleum have their functional currency in US dollars to offset the traditional impact.
It does so by spreading excess cash among a number of different currencies as determined by the company's treasury function, as opposed to holding it in the subsidiary's functional currency.
Although these subsidiaries have the same functional currency, the Euro, they can't just move money between them without impact.
Enterprises are likely to choose a currency which is used in their trading in larger volume or higher frequency as the functional currency in their accounting operation.
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