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.

  1. Par Value

    The face value of a bond. Par value for a share refers to the ...
  2. Foreign Currency Effects

    The gain or loss on foreign investments due to changes in the ...
  3. Face Value

    The nominal value or dollar value of a security stated by the ...
  4. Base Currency

    The first currency quoted in a currency pair on forex. It is ...
  5. Eurodollar Bond

    A U.S.-dollar denominated bond issued by an overseas company ...
  6. Unicorn

    In the world of business, a unicorn is a company, usually a start-up ...
Related Articles
  1. Investing Basics

    Introduction To Investment Diversification

    Reducing risk and increasing returns in your portfolio is all about finding the right balance.
  2. Forex Education

    Corporate Currency Risks Explained

    Transaction, translation and economic risks can affect a company's balance sheet.
  3. Active Trading

    How Companies Use Derivatives To Hedge Risk

    Derivatives can reduce the risks associated with changes in foreign exchange rates, interest rates and commodity prices.
  4. Forex Education

    The History Of Money: From Barter To Banknotes

    Money has been a part of human history for at least 3,000 years. Learn how it evolved.
  5. Bonds & Fixed Income

    The Money Market: A Look Back

    Learn how past inflationary periods can predict future real rates of return for cash investments.
  6. Investing

    How China’s Slowdown Affects Your Latin American Investments

    China's economy is slowing down and its major Latin American trading partners will feel the headwinds, as will your Latin American investments.
  7. Budgeting

    How to Cost Effectively Spend on Baby Clothes

    Don't let your baby's wardrobe derail your budget. These top tips help you to save money and spend wisely on baby clothes.
  8. Budgeting

    Key Questions to Ask Before Moving in Together

    Moving in together is a big step. Here are some key financial questions to ask your partner before you make the move.
  9. Investing

    Aging Japan Is an Arrow in the Back of Abenomics

    There are many factors affecting Japan’s economic difficulties, but the true killer of Abenomics may simply be Japan’s aging population.
  10. Personal Finance

    Avoid These 5 Financial Mistakes in a Divorce

    To ensure you get what's rightfully your's in a divorce, avoid these financial mistakes.
  1. How can I trade in cross currency pairs if my forex account is denominated in U.S. ...

    The forex market allows individuals to trade on nearly all of the currencies in the world. However, most of the trading is ... Read Full Answer >>
  2. How can companies use the cash flow statement to mislead investors?

    Cash flow is a means for most investors to examine the actual economics of a business they might invest in, especially from ... Read Full Answer >>
  3. Can working capital be too high?

    A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>
  4. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  5. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  6. What licenses does a hedge fund manager need to have?

    A hedge fund manager does not necessarily need any specific license to operate a fund, but depending on the type of investments ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!