Reporting Currency


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.

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    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  2. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  3. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  4. 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 >>
  5. What is a profit and loss (P&L) statement and why do companies publish them?

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