*Global businesses use various currencies for transactions today. However, they must report their financial statements in one currency.
*This currency to which the reported financial statements are converted to, and expenses are transacted is termed the company's functional currency.
*Although base currency is often used to refer to the same, the functional currency seems to be a more appropriate term.
*To make it simple, you can use the currency in which you transacts the most.
*The currency that fluctuation mainly affects the market prices of any goods or services.
*Functional currency is important since it helps businesses to maintain consistency in their operational processes and cash accounting.
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