CERTYNEX IFRS ACADEMY

Nordelle, established in the euro area, sells its products on the Swiss market where local competition and regulation determine the prices, denominated in Swiss francs. Its production costs are also mainly in Swiss francs. Where does management begin its analysis of the functional currency?

With the currency of the country of the head office, because the entity is established there and it is its shareholders' currency.

With the primary indicators (selling prices, competition, regulation, costs), which here designate the Swiss franc.

With the presentation currency wanted by the shareholders, which automatically sets the entity's functional currency.

With the currency of the entity's borrowings, which takes priority over selling prices and costs.