DEFINITION of 'Reporting Currency'
The currency which is used for an entity's financial statements. The reporting currency in financial statements and other financial reports are easiest to understand when they are compiled using only one currency. However, many large companies have operations in many different countries. This often requires doing business with a variety of currencies.
BREAKING DOWN 'Reporting Currency'
To compile financial reports for multicurrency firms, accountants must convert foreign currencies into a single reporting currency at the current exchange rate. To standardize this process, there are a variety of accounting regulations which prescribe a uniform methodology for carrying out this conversion. This helps to maximize the transparency with which these financial reports are presented.