Question

Currency used in presenting the financial statements

Answer 1

International Accounting Standard 21 (IAS 21) defines functional currency as “the currency of the primary economic environment in which the entity operates”. The same Standard defines presentation currency as “the currency in which the financial statements are presented”.

Answer 2

• Currency used in presenting the financial statements is the reporting currency.  
• Currency is the medium of exchange of goods and services. It is money in the form of paper or coins which is generally accepted as a method of payment.  
• Financial statements are the record of all the financial transactions of a business.  
• It includes all the financial information which is relevant and useful and is required by various stakeholders like the owner of the company, the government as well as the shareholders.
• It shows the financial position of a business at a given point.