functional currency

Definition

Currency of the country (called the 'primary environment' ) in which a firm a conducts its business activities and generates most or all of its income and expenses. It may or may not be the currency in which it presents its financial statements, which is called reporting currency or presentation currency. For U.S. firms operating in foreign countries, the reporting requirements are governed by the rules of the Financial Accounting Standards Board, particularly statements 8 and 52 (FASB No. 8 and FASB No. 52).

Use functional currency in a sentence

You need to make sure that you get a good rate if you need to change your money in to the functional currency.

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While we generated a lot of functional currency, there was still a hint of trepidation that the political unrest could cause problems down the line.

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Whereas pennies are considered legal tender, when preparing funds for the purchase of large items such as a boat, car, or home, you will find that pennies must be deposited through an institution before being accepted, as pennies are not a functional currency in this situation.

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functional cost analysis (FCA) functional distribution of income