IAS 21 — Determination of functional currency of investment holding company

Date recorded:

The IFRIC discussed a request for guidance on determining the functional currency of an investment holding company and, in particular, the issue whether the underlying economic environment of subsidiaries should be considered in determining the functional currency in the separate financial statements of the investment holding company.

Without much discussion, the IFRIC agreed that determination of functional currency of any company required the use of judgement and must be based on all the facts and circumstances. The IFRIC concluded that any guidance it could provide would be nature of implementation guidance only and consequently decided not to add the item on its agenda.

Further discussion focus on drafting of the tentative agenda decision, with several IFRIC members emphasising that there is no concept of a 'group functional currency'.

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