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accounting currency

The accounting currency is the monetary unit used by a firm to record its transactions and to present its financial statements. The accounting currency is also known as the reporting currency or presentation currency. In most cases, the accounting currency is also the firm’s ‘functional currency’, i.e. the currency in which it primarily generates and expends its cash.

A company can decide to present its financial statements in a currency different from its functional currency, for example when preparing a consolidated report for its parent in a foreign country. While a company can choose its accounting currency, it cannot change its functional currency.