Where the choice of an entity's functional currency is not clear-cut,the choice should be based on currency of largest proportion of export sales.

Question

Quizplus · Accepted Answer

The choice of an entity's functional currency should be based on various factors such as the currency of the primary economic environment in which the entity operates, currency of the country with which it has the closest economic relationship, currency of the financing activities, and currency in which the entity generates and expends cash. The currency of largest proportion of export sales is not the only factor to be considered.

Where the Choice of an Entity's Functional Currency Is Not