Question

Answer the following questions and use GAAP cite appropriate justification for your answer.

5.         Is it possible for an entity to have more than one functional currency?

Answer 1

Functional currency refers to the main currency used by a business or unit of a business. It is the monetary unit of account of the principal economic environment in which an economic entity operates

Both U.S. GAAP and IFRS require entities to remeasure assets, liabilities, income and expenses into the entity’s functional currency, which is the currency of the primary economic environment in which the entity operates. Both U.S. GAAP and IFRS also require remeasurement into the functional currency before translation into the reporting currency.

Entity cannot have more than one functional currency.