Thames Air pie case - CFAI mock q19

CFA Level II
#1

I just want to see if my understanding is correct or not because I got this question wrong on the exam. Under IFRS, the functional currency will be the currency which dominates the sales price of the goods and services produced by the entity. And under US GAAP, it depends on whether the subsidiary is well integrated with the parent or not. If yes, use temporal and if no, use current rate method.

I did horribly on this one - I chose euro as the functional currency for Tagus as it was stated that it incurs all costs related to operating and maintaining rental properties in euros. Only 2 days left and losing confidence.

#2

here’s a pointer from CFAI that you may forget:

unless stated, always assume IFRS. if the company complies with GAAP, the vignette will tell you.

this applies to all levels of CFA exam afaik

#3

Yes, I missed that the method was different under IFRS. Thanks, edbert!