Question

On May 24, 2011, Invitel Holdings announced its financial results for the quarter ended March 31, 2011. The results reflect the consolidated financial results of Magyar Telecom B.V. and its subsidiaries. The reporting currency is the euro; however, the functional currency is the Hungarian forint (the currency of the primary economic environment in which the Company operates). When comparing the financial results for the quarter ended March 31, 2011, to the financial results for the quarter ended March 31, 2010, the reported results in euros have been affected by the difference between the average HUF/EUR exchange rates. The
Hungarian forint depreciated against the euro by 1% with an average HUF/EUR exchange rate of 272.48 during the quarter ended March 31, 2011, compared to the average HUF/EUR exchange rate of 268.57 during the quarter ended March 31, 2010.

Required:
Explain how the change in the exchange rate will affect Invitel’s consolidated financial statements.



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  • CreatedMarch 13, 2015
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