SIMCO Commercial Corporation (SCC) is located in
Godalming, United Kingdom (U.K.). SCC is owned by an investment group located
in London and all corporate functions are performed in Godalming. However,
manufacturing operations occur in both the U.K. and South Africa. SCC’s
president made the statement that the corporation should use the EU as
functional currency since administrative functions are performed in the U.K and
the corporate headquarters are domiciled here. However, the head of operations
stated that the functional currency, at least for the manufacturing arm, should
be the South African Rand because all materials are purchased locally and 80%
of manufacturing occurs in South Africa.

Prepare a one page essay that discusses which
individual you agree with and why. In your essay, address the following:

  • What
    are the ramifications to the consolidated financial statements of SCC if
    the EU is used as the functional currency for the manufacturing operations
    located in South Africa?
  • What
    are the ramifications to the consolidated financial statements of SCC if
    the South African Rand is the functional currency used for the
    manufacturing operations located in South Africa?

Please make this 1 page and in APA
format.

Please include a reference page and
site sources within the paper.

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