An entity may carry on foreign activities in two ways. It may have transactions in foreign currencies or it may have foreign operations. The objective of this Standard is to prescribe how to include foreign currency transactions and foreign operations in the financial statements of an entity and how to translate financial statements into a presentation currency. Regarding the foreign operations, the Board considered two possible translation methods: the first is to translate all amounts (including comparatives) at the most recent closing rate and the second method results in the same amounts in the presentation currency regardless of whether the financial statements of a foreign operation are first translated into the functional currency of another group entity (eg the parent) and then into the presentation currency or translated directly into the presentation currency.