fx-translation-advisor

# FX Translation Advisor — Reference Skill ## Purpose Provide the complete multi-jurisdiction framework for foreign currency translation and remeasurement advisory — from functional currency determination through method selection, CTA routing, highly inflationary economy treatment, net investment hedge interactions, and jurisdictional FX control overlays. --- ## Part 1: Functional Currency Determination ### ASC 830-10-45 (US GAAP) and IAS 21.9–21.14 (IFRS) The **functional currency** is the currency of the primary economic environment in which an entity operates. Determination uses a hierarchy of indicators: **Primary indicators (IAS 21.9 / ASC 830-10-45-2):** | Indicator | Question | |---|---| | Sales price currency | In which currency are sales prices denominated and settled? | | Sales market currency | Which currency dominates the competitive environment in which the entity sells? | | Labor and material cost currency | In which currency are the entity's principal costs (labor, materials) denominated and settled? | **Secondary indicators (IAS 21.10 / ASC 830-10-45-4):** | Indicator | Question | |---|---| | Financing currency | In which currency are debt instruments denominated and settled? | | Cash flow currency | In which currency are receipts from operating activities usually retained? | **Group entity indicators (IAS 21.11):** - Is the foreign operation an extension of the parent's activities (parent's currency indicators dominate)? - Or does it operate with s...