European Currency Unit - ECU


DEFINITION of 'European Currency Unit - ECU'

The European Currency Unit (ECU) was the precursor to the Euro, the shared single currency of the European Union's member countries. While the Euro is the actual currency of the European Union, the ECU was artificial currency developed by the initial EU member states for their internal accounting purposes.

BREAKING DOWN 'European Currency Unit - ECU'

The ECU was first adopted in 1979 by the European Economic Community, the predecessor of the European Union. In 1999, the ECU was replaced by the Euro, at parity.

  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Exchange Rate Mechanism - ERM

    An exchange rate mechanism is based on the concept of fixed currency ...
  3. Currency

    A generally accepted form of money, including coins and paper ...
  4. Parity

    1. In general, a situation of equality. Parity can occur in many ...
  5. European Union - EU

    A group of European countries that participates in the world ...
  6. European Central Bank - ECB

    The central bank responsible for the monetary system of the European ...
Related Articles
  1. Options & Futures

    American Vs. European Options

    These two options have many similar characteristics, but it's the differences that are important.
  2. Forex Education

    Top 8 Most Tradable Currencies

    Currencies can provide diversification for a portfolio that's in a rut. Find out which ones you need to know.
  3. Forex Education

    The Impact Of Currency Conversions

    Will a rising or falling dollar hurt you or your company? In this article we explore the impact of currency converisons on consumers, comanies, and countries.
  4. Options & Futures

    Exploring European Options

    The ability to exercise only on the expiration date is what sets these options apart.
  5. Options & Futures

    Trading OEX Options: The Risk Of Early Exercise

    Exercising early can benefit options traders, but only when trading American-style options.
  6. Economics

    Calculating Days Working Capital

    A company’s days working capital ratio shows how many days it takes to convert working capital into revenue.
  7. Professionals

    Career Advice: Accountant Vs. Controller

    Learn about the differences between controllers and accountants, how the two are related and which is the best career choice for aspiring bookkeepers.
  8. Stock Analysis

    The Biggest Risks of Investing in Caterpillar Stock

    Learn about the primary risks faced by Caterpillar's investors. Discover why global macroeconomic cycles and currency fluctuations are important risk factors.
  9. Professionals

    What is Cash Basis Accounting?

    Cash basis accounting recognizes revenues and expenses at the time cash is paid or received.
  10. Entrepreneurship

    What's a Good Profit Margin for a Mature Business?

    How to determine if the amount you clear dovetails with the competition.
  1. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency ... Read Full Answer >>
  2. Who decides when to print money in India?

    The Reserve Bank of India, or RBI, manages currency in India. The bank's additional responsibilities include regulating the ... Read Full Answer >>
  3. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  4. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  5. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>
  6. Do dividends go on the balance sheet?

    The only account recorded on the balance sheet, when dividends are declared and before they are paid out to a company's shareholders, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Revenue

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

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

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  4. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Capitalized Cost

    An expense that is added to the cost basis of a fixed asset on a company's balance sheet. Capitalized Costs are incurred ...
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!