Question

FASB ASC 830-10-45-7 requires consistency in the functional currency defined for a given entity, but does allow for a change in the defined currency if a change in circumstances warrants such a change. In this event of a change in the functional currency, is the company required to restate previously issued financial statements in terms of the new financial currency?
Are measurement ring gains and losses considered to be extraordinary items? (see FASB ASC 830-10-45-19

Answer 1

1.No the company is not required to restate previously issued financial statements in terms of the new financial currency. Once the functional currency for a foreign entity is determined, that determination shall be used consistently unless significant changes in economic facts and circumstances indicate clearly that the  functional currency has changed. Previously issued financial statements shall not be restated for any  change in the functional currency.

2.whether it is treated as an extraordinary item or not is completely based on the nature of event or transaction. If the event or transaction is considered abnormal, not related to ordinary company activities, and is unlikely to recur in the foreseeable future then it is treated as an extraordinary item. However as perFASB ASC 830-10-45-19 "Gains or losses from exchange or translation of foreign currencies, including those relating to major devaluations and revaluations, shall not be reported as extraordinary items because they are usual in nature or may be expected to recur as a consequence of customary and continuing business activities. "