Change in functional currency

摘要

A UK entity reporting under FRS 23, Foreign Currencies, operates a foreign subsidiary in France with sterling as its functional currency. A significant change in trading operations and circumstances occurred during the period ending on 30 June 20×6. It indicated that sterling no longer faithfully represented the underlying transactions, events and conditions of the foreign subsidiary. UK management decided that the euro should be the functional currency of its foreign operation and that all transactions undertaken after 30 June 20×6 should be recorded in euros. How is this change in functional currency accounted for?