The functional currency of your subsidiaries impacts not only how your financials are prepared, it sets the strategic stage for how your company views currency exposures, determines if you qualify (or not) for special hedge accounting, and even how competitive you can be against your rivals.
This course explains the long and sometimes unfavorable and lasting impacts of a company’s functional currency decision. We also discuss how to determine the functional currency, why it matters so much, and some of the things to watch out for when setting up a new legal entity.
Learning Objectives
- Discover the six economic indicators for determining an entity's functional currency
- Recognize the implications of choosing local vs. a parent’s currency as the functional currency.
- Identify the special hedge accounting limitations related to the functional currency decision.
- Discover a greater appreciation for the strategic decision surrounding the functional currency of an entity
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Prerequisites
Prerequisite: Basic proficiency in accounting and corporate finance and experience with transaction and translation accounting and a basic understanding of the functional currency concept will be helpful.
Advanced Preparation: None