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What is the currency used to show financial statements?

Question

What is the currency used to show financial statements?

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Solution

The currency used to show financial statements is typically the official currency of the country where the company operates. For multinational companies, they may present their consolidated financial statements in a 'presentation currency', often in US dollars or Euros, for the convenience of investors and analysts.

Here are the steps to determine the currency used in financial statements:

  1. Identify the country where the company is headquartered or primarily operates. This is usually where the company is incorporated or has its main office.

  2. Look up the official currency of that country. This is typically the currency that the company uses for its financial transactions and records.

  3. Check the company's annual report or financial statements. The currency should be clearly stated. If the company operates in multiple countries, it may use a 'presentation currency' for its consolidated financial statements.

  4. If the company uses a 'presentation currency', it should provide a note explaining this choice and possibly providing exchange rates for the convenience of users of the financial statements.

  5. If you are still unsure, you can contact the company directly or consult with a financial advisor.

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