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In determining the functional currency of a foreign operation, among other things, it is based on the foreign operation’s relationship with the parent.
One aspect is if the operations of the foreign entity are carried out as an extension of the parent’s activities, its functional currency is certain to be the same as the parent’s.
Question sir, does this means that the foreign operation’s activities have to be synonymous with the parent’s? Example if the parent is engaged in mining, does the foreign entity has to be in mining as well, or can the foreign entity be engaged in other business activities, example retail or services?
Please clarify sir.
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