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Functional Currency vs Reporting Currency Reporting currency is the currency in which financial statements are presented. Functional currency depends on the currency of the country that the company operates in. Reporting currency for subsidiaries depends on the currency used by the company headquarters.

Add transactions in a foreign currency Open the transaction details and select Add. In the currency fields, enter the Foreign amount or the Exchange rate your bank provides.

Key Takeaways The reporting currency is the currency in which a company will report its financial statements. A reporting currency must be one currency, which makes it easier to understand and follow financial documents.

At the date a foreign currency transaction occurs, each asset, liability, revenue, expense, gain, or loss arising from the transaction is recorded in the functional currency of the recording entity using the exchange rate in effect at that date.

At the date a foreign currency transaction occurs, each asset, liability, revenue, expense, gain, or loss arising from the transaction is recorded in the functional currency of the recording entity using the exchange rate in effect at that date.

The foreign currency gain is recorded in the income section of the income statement.

At the date a foreign currency transaction occurs, each asset, liability, revenue, expense, gain, or loss arising from the transaction is recorded in the functional currency of the recording entity using the exchange rate in effect at that date.

The gains and losses arising from foreign currency transactions that are recorded and translated at one rate and then result in transactions at a later date and different rate are recorded in the equity section of the balance sheet.

The subsidiaries use their local currency to prepare their financial statements, whereas the parent company uses USD to prepare its consolidated financial statements. USD, in this case, is called the presentation currency.

Go to Bookkeeping then Transactions then select Bank transactions (Take me there), or go to Bank transactions (Take me there). From the For review tab, open the transaction details and select Add. In the currency fields, enter the foreign amount or the exchange rate your bank provides.