Viewpoints: Determining an oil and gas entity's functional currency (Oil & gas)

Understand which factors an oil and gas organization must consider to determine its functional currency under International Financial Reporting Standards (IFRS).

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As oil and natural gas companies often do business globally and enter into transactions denominated in foreign currencies, a question that often arises is: How do I determine our functional currency under IFRS? As Viewpoints: Applying IFRSs in the Oil and Gas Industry: — Functional Currency outlines, it depends on specific facts and circumstances relevant to your organization’s operations.

Prepared by Chartered Professional Accountants of Canada (CPA Canada), the Canadian Association of Petroleum Producers, and the Small Explorers and Producers Association of Canada, this resource for junior oil and gas companies features information on:

  • what functional currency is, and how it differs from presentation currency
  • IAS 21, The Effects of Changes in Foreign Exchange Rates
  • the primary and secondary indicators that influence an entity’s functional currency
  • establishing the functional currency for a Canadian holding company
  • the impact of revenue generation on determining functional currency