Posted: June 24th, 2022

Functional currency is the currency of the subsidiary’sprimary economic environment. It is usually identified as the currency in which the company generates and expends cash.

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Functional currency is the currency of the subsidiary’s
primary economic environment. It is
usually identified as the currency in which the company generates and expends
cash.
Your assignment is to report on the
functional currency of your Microsoft. When
researching your answer keep in mind the following and include details
regarding Microsoft:
Both U.S. GAAP and IFRS recommend the following factors:
the location of primary sales markets, sources of materials and labor, the source of financing, and the amount of intercompany transactions should
be evaluated in identifying an entity’s functional currency. U.S. GAAP does not provide any
guidance as to how these factors are to be weighted (equally or otherwise) when
identifying an entity’s functional currency. Unlike U.S. GAAP, IAS 21 provides
a hierarchy of factors to consider (reference the link on the next page for details).
https://www.iasplus.com/en/standards/ias/ias21

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