DEFINITION of 'Denomination'

A classification for the stated or face value of financial instruments, including currency notes and coins, as well as bonds and other fixed-income investments. Denomination may also refer to the base currency in a transaction, or the currency in which a financial asset is quoted. This further classification helps clarify acceptable payment options in transactions.

BREAKING DOWN 'Denomination'

For example, currency notes dispensed by most ATMs in the U.S. are only available in certain denominations such as $20 bills or $100 bills. In a trade transaction, an exporter based in Europe may invoice the buyer in U.S. dollars, making the transaction a U.S. dollar-denominated one. While most commodities were quoted in terms of the greenback, as of 2011, commodities such as crude oil could be quoted in other currencies of denomination such as the euro.

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  5. Base Currency

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