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Which one of the below are primary indicators for assessing functional currency?

Revenues & Cash inflows

Financing Activities

Retention of Operating Income

Degree autonomy

The Bank's subsidiary has a functional currency in USD. The subsidiary purchased a software license for $1M EUR. The USD/EUR FX rate went from 1.10 to 1.05 from the date of purchase to year-end. How much is the FX gain or loss recorded in the P&L?

$50,000 gain

$50,000 loss

None of the above. FX gain and loss goes to OCI

If the item in question #2 was an accounts receivable instead of intangibles, how much FX gain or loss is recorded in P&L?

$50,000 gain

$50,000 loss

None of the above. FX gain and loss goes to OCI

If the item in question #2 was an accounts payable instead of intangibles, how much FX gain or loss is recorded in P&L?

No gain or loss

$50,000 gain

$50,000 loss

None of the above. FX gain and loss goes to OCI

Which one of the following is monetary items?

Property, plant, and equipment

Pension liabilities

Prepaid insurance

Inventories

The Bank's subsidiary in China issued a loan to a customer for $1M USD on April 30, 2016. The subsidiary's functional currency is CNY. The amount remains outstanding as at May 31, 2016. The exchange rate are as follows as at April 30, 2016 and May 31, 2016: April 30, 2016 CNY to USD = 0.1544 CNY to CAD = 0.1938 USD to CAD = 1.2549 May 31, 2016 CNY to USD = 0.1523 CNY to CAD = 0.1981 USD to CAD = 1.3003 What are the foreign exchange gains and losses recorded to income (in CNY)?

$89,304 gain

$89,304 loss

$45,541 gain

$45,541 loss

Using the same facts as question 6, what are the foreign exchange gains and losses recorded to OCI (in CAD)?

$89,304 gain

$89,304 loss

$45,541 gain

$45,541 loss

Which of the below are net investment in a foreign operation?

The Bank provides a loan to its subsidiary maturing in 5 years

The Bank provides IT infrastructure and related training to its subsidiary

The Bank provides a loan to its subsidiary that does not have a fixed maturity date nor is it expected to be repaid

None of the above

How does the Bank classify its net investment in foreign operation?

OCI

Corporate Position

Structural Position

Net Income

Which of the following is true for a change in functional currency?

There is a significant change in the underlying transactions, events, or conditions within the economy in which the entity operates.

The units simply needs to complete the form and does not need approval from APP

The changes are accounted for retrospectively.

There can never be a change in functional currency once it is set at the inception of the foreign entity.

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