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2. FOREIGN OPERATIONS. STUDY OBJECTIVES:1.NEED FOR TRANSLATION2.NOTION OF FUNCTIONAL CURRENCY3.TRANSLATION PRINCIPLES AND PROCEDURE4.NET INVESTMENT IN A FOREIGN OPERATION5.DISPOSAL OF A FOREIGN OPERATION6.CHANGE OF FUNCTIONAL CURRENCY7.TRANSLATION WHERE SAME FUNCTIONAL CURRENCY ???8.THE PRESENTATION CURRENCY9.DISCLOSURE ISSUES.
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1. ADVANCED ACCOUNTING2010Week 21
FOREIGN OPERATIONS
IAS 21
2. 2 FOREIGN OPERATIONS STUDY OBJECTIVES:
1. NEED FOR TRANSLATION
2. NOTION OF FUNCTIONAL CURRENCY
3. TRANSLATION PRINCIPLES AND PROCEDURE
4. NET INVESTMENT IN A FOREIGN OPERATION
5. DISPOSAL OF A FOREIGN OPERATION
6. CHANGE OF FUNCTIONAL CURRENCY
7. TRANSLATION WHERE SAME FUNCTIONAL CURRENCY ???
8. THE PRESENTATION CURRENCY
9. DISCLOSURE ISSUES
3. 3 1. NEED FOR TRANSLATION 1.1 An entity may be involved in foreign currency in 2 ways: It may have foreign currency transactions (buy / sell goods / services & borrow / lend funds which are foreign currency-denominated It may have a foreign operation (foreign subsidiary, JV, associate or branch 1.2 IAS 21 (deals with both) Forex transactions Foreign operations (completed already) (this lecture week)