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Which currency regard as the functional currency

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A foreign operation harvests pineapples that are shipped to Australia for processing at the Australian parent entity's canning facility. All senior personnel at the foreign operation are parent entity employees. Monthly invoices for pineapples supplied to the parent are denominated in US dollars. The parent entity pays these invoices with US dollars obtained by selling its finished product to US customers. Payments to the foreign operation cover all running costs but long term financing is provided by the parent entity.

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Problem 1: In relation to the above case, briefly discuss which currency you regard as the functional currency? Offer reasons for your answer.

Reference no: EM132779865

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