Conditions for the change

Learning objectives

• Identify the circumstances that justify a change in functional currency.L2, L3

Normative references

• IAS 21 §13The functional currency reflects the underlying transactions, events and conditions that are relevant to the entity; once determined, it is not changed unless there is a change in those underlying transactions, events and conditions.
• IAS 21 §36Reminder of para. 13: because the functional currency reflects the underlying transactions, events and conditions, it can be changed only if there is a change in those underlying transactions, events and conditions; example: a change in the currency that mainly influences sales prices may lead to a change in functional currency.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Bastel, whose selling prices, costs and financing have stayed in euros, wishes to adopt the dollar as its functional currency so that its presentation is closer to that of its competitors. Nothing has changed in its activities. What should be said about this wish?L2