Foreign currency accounting – Determining functional currency

PwC's accounting podcast

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We kick off our miniseries on foreign currency accounting with an episode on determining functional currency, which is the currency of the primary economic environment in which a distinct and separable operation operates.
In this episode, we discuss:

• 03:52 – Identifying distinct and separable operations
• 19:01 – Determining functional currency
• 25:45 – Common pitfalls in evaluating functional currency
• 37:37 – Changes in functional currency
• 40:19 – Highly inflationary economies

For more information, see chapter 3 of our Foreign currency guide. Additionally, follow this podcast on your favorite podcast app for more episodes.
Bret Dooley is a Deputy Chief Accountant in PwC’s National Office who leads teams focused on the financial services sectors and accounting for financial instruments. He has over 25 years of experience in the financial services, banking, and capital markets industries. Bret focuses on emerging financial reporting issues related to financial instruments, developing interpretive guidance, and assisting clients in resolving complex accounting matters.
John Horan is a managing director in PwC’s National Office where he assists clients with complex accounting issues in the areas of foreign currency, liabilities and equity, earnings per share, and derivatives and hedging. John specializes in large capital transactions and initial public offerings.
Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [e-mail].

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1. Foreign currency accounting – Determining functional currency (00:00:00)

2. Identifying distinct and separable operations (00:03:52)

3. Determining functional currency (00:19:01)

4. Common pitfalls in evaluating functional currency (00:25:45)

5. Changes in functional currency (00:37:37)

6. Highly inflationary economies (00:40:19)