Differentiate Between Local, Functional, and Reporting Currencies

Question

Examlex · Accepted Answer

The Answer is The local currency is the currency that is used in the host country of a subsidiary. The functional currency is the currency in which most of the subsidiary's business is conducted. For small, developing countries, the functional and local currencies may not be the same. For example, a subsidiary in Korea might find all of its revenues and expenses denominated in Japanese yen. For larger, more developed countries, the local and functional currencies are the same. The reporting currency is the currency in which the parent firm's consolidated financial statements must be cast.

Differentiate Between Local, Functional, and Reporting Currencies

Essay

Correct Answer:
Verified

Differentiate Between Local, Functional, and Reporting Currencies

Essay

Correct Answer:VerifiedShow Answer

Correct Answer:
Verified