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Explain some Examples under FASB 52 that a foreign entity's functional currency would be similar as the parent firm's currency.
Answer: Three instances under FASB 52, in which the foreign entity's functional currency will be similar as the parent firm's currency, are:
a) The foreign entity's cash flows directly influence the parent's cash flows and are readily available for remittance to the parent firm;
b) The sales prices for the foreign entity's products are approachable on a short-term basis to exchange rate changes in which sales prices are defined through worldwide competition; and,
c) The sales market is mainly located in the parent's country or sales contracts are denominated in the parent's currency.
Explain in detail various sources of finance. Which is the most appropriate one?
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