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This is quite embarrasing to be asking this question since this has already been delt in FA and FR however I have managed to forget it.
Sir are the statements prepared in the functional currency? if Yes then what is the purpose of presentation currency.
Can you please give an example when they are the same and when they are different?
Thank you in advanceAssume Marks and Spencer (UK) has a subsidiary Marks et Spencer (France).
The French subsidiary will trade locally in euro, its FUNCTIONAL CURRENCY.
It will prepare 2 sets of accounts:
1. In euro for the French Authorities.
2. In pounds ready for consolidation into the group accounts.
So the French company will have two PRESENTATION CURRENCIES.Sir when lets say the parent has a function currency has dihram while the subsidiary has functional currency of Ruppes. If they have a presentation currency of Dollars. Will both of them need to translate to Dollar when making groups ACS. what about when making indvidual FS?
Scenario not likely. 🙂
In your exam functional currency as follows – parent dollars, sub rupees
Sub’s presentation currency rupees
Parent and group presentation currency dollars.
The study text defines presentation currency as the one FS is shown in however the lecture video says that functional currency is the currency FS is shown in.
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