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Functional currency

The currency of the company's primary economic environment — the one it earns and spends in; books are kept in it before translation into the presentation currency.

How to read the number

Explains why a weaker rouble does not always hand an exporter a paper gain: if the books are kept in the currency of its revenue, translation hits other items instead.

When the metric lies

It need not match the presentation currency and is not a free choice: it follows from the facts of the business, and changing it changes the whole series.

Related terms