Example: Consolidation with Foreign Currencies
Last update: 10/2022 (video added to the end of the article) In today’s world, most groups spread their activities abroad and logically different members of the group operate in different currencies. Is the consolidation process of combining the financial statements of two (or more) companies…
Monetary or Non-Monetary?
Updated: 2023 – please scroll below to download the infographics for your future reference, it is free. When you need to translate your items denominated in foreign currency to your own functional currency, then there’s one little problem: Is that item monetary or non-monetary? If…
028: How to determine the functional currency when a company deals with more currencies?
Imagine you sell in EUR, make purchases in INR and your loans are denominated in USD… what is your functional currency in this case? Learn here!
What closing rate to apply when more rates are available?
What closing rate shall you select under IFRS when more rates are available at the reporting date (mid rate, sell rate, buy rate)? Find out here…
How to make a change in functional currency
Some time ago I was a part of an audit team auditing the financial statements of a medium-sized manufacturing company. When we received the trial balance of that client, we spotted something strange: There were loads of transactions in a foreign currency and resulting impact…
How to Make Consolidated Statement of Cash Flows with Foreign Currencies
Did you know that many groups prepare their consolidated cash flow statement completely incorrectly? And, if you are well-experienced accountant, you can actually spot the faulty numbers instantly when you look to the statement of cash flows. Sadly, this wrong method is often taught in…
The Best of CPDbox 2015
The year-end is coming closer and closer; the closings have already started to push their pressure on all of us, the exam season approaches and we live the busy lives. I know that this part of the year is usually the second busiest for any…
Accounting for Prepayments in Foreign Currency under IFRS
Last update: 2023 Transactions in foreign currencies are sometimes a nightmare. Obviously, we are trading with each other, our own currencies are different and foreign exchange rates are jumping up and down constantly. We are all aware of basic rules with regard to selection of…
IAS 21 The Effects of Changes in Foreign Exchange Rates
These days people use about 180 currencies world wide! The truth is that we, people, don’t want to stay isolated. We love to sell, buy, import, export, trade together and do many other things, all in foreign currencies! When you look at the business world,…
