• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Change of functional currency

Forums › Qualified Members forum › Change of functional currency

  • This topic has 0 replies, 1 voice, and was last updated 3 years ago by Ungara.
Viewing 1 post (of 1 total)
  • Author
    Posts
  • March 27, 2022 at 5:36 pm #652050
    Ungara
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    We have a company which functional currency was the USD up to the year 2020. The Company’s share capital is EUR 10.000, the equivalent of USD 14.500. As of 01/01/2021 the Company’s functional currency will be the EUR. As per IAS 21 the effect of a change in the functional currency is accounted for prospectively. Therefore, an entity translates all items into the new functional currency using the exchange rate at the date of change. The resulting translated amounts for non-monetary items are treated as their historical cost.
    Translating the USD 14.500 with the applicable rate on 01/01/2021, will be EUR 13.000. Which is not correct, since in reality the Company’s share capital is EUR 10.000. What shall we do with the resulting EUR 3.000 difference? Does it go to the translation reserve? However as per IAS 21, after changing the functional currency, we should not have a translation reserve, as this is a different translation from translating the functional currency to a different presentation currency. Can someone please advise?

  • Author
    Posts
Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • azubair on Optimal pricing – equations- ACCA Performance Management (PM)
  • Rajpoot on FA Chapter 5 Questions IAS 37 – Provisions, Contingent Liabilities and Contingent Assets
  • bizuayehuy on Foreign exchange risk management (1) Part 1 – ACCA (AFM) lectures
  • effy.sithole@gmail.com on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • kyubatuu on MA Chapter 6 Questions Inventory Control

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in