In 2014, people used about 150 currencies world wide! The difference between exporting and foreign direct investment 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!
Moreover, the exchange rates change every minute. So how to bring a bit of organization into this currency mix-up? That’s why there is the standard IAS 21 The Effects of Changes in Foreign Exchange Rates. What is the objective of IAS 21?
How to translate financial statements into a presentation currency. What exchange rates shall we use? How to report gains or losses from foreign exchange rates in the financial statements? Functional currency is the currency of the primary economic environment in which the entity operates. Presentation currency is the currency in which the financial statements are presented. In most cases, functional and presentation currencies are the same. It’s a full IFRS learning package with more than 40 hours of private video tutorials, more than 140 IFRS case studies solved in Excel, more than 180 pages of handouts and many bonuses included.