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Cima F2

This document discusses several International Financial Reporting Standards (IFRS) including IFRS 3 on business combinations, IAS 28 on investments in associates, and IAS 31 on interests in joint ventures. It also covers IAS 27 on consolidated and separate financial statements. Additionally, it outlines the factors that determine a company's functional currency according to IAS 21 and the methods for translating the functional currency to the presentation currency.

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Sruthi Radhakrishnan
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951 views1 page

Cima F2

This document discusses several International Financial Reporting Standards (IFRS) including IFRS 3 on business combinations, IAS 28 on investments in associates, and IAS 31 on interests in joint ventures. It also covers IAS 27 on consolidated and separate financial statements. Additionally, it outlines the factors that determine a company's functional currency according to IAS 21 and the methods for translating the functional currency to the presentation currency.

Uploaded by

Sruthi Radhakrishnan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
  • F2 - Financial Management

IFRS 3 : Business Combinations.

IAS 28 : Investments in Associate.


IAS 31 : Interests in Joint Ventures.
IAS 27 : Consolidated and Separate Financial Statements.

F2 - Financial Management
Functional Currency - IAS 21 The Effects of Changes in Foreign Exchange Rates
- Currency of the primary economic environment in which it operates.
Factors determining functional currency:
a) Currency primarily influencing selling prices for goods and services.
b) Currency used by countrys competitive forces and regulations.
c) Currency for financial activities (debt and equity instruments).
d) Currency in which receipts from operations generally kept.
e) Currency influencing labour, material and other costs of providing goods or services.
Translation of Functional currency to Presentation currency: method
- Assets and liabilities should be translated using the closing rate at the year end date.
- Income and exp should be translated at the exchange rates in force at the date of the
transactions.
- All resulting exchange differences are recognised as part of equity, until such time as the
investment in the foreign operation is realised.

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