Base currency (GL/CU)

Base currency is the functional operating currency of a General Ledger company.

Uses of base currency

The base currency is used for financial reporting of company balances according to international accounting standards. The base currency uses accounts and transactions for its default values unless you override it for a specific account or transaction. Non-base transaction amounts and account balances are exchanged to the base currency for financial reporting. If several companies with different base currencies are consolidated for financial reporting into a reporting company, then the Currency application translates each company's balances to the base currency of the reporting company.

Example

XYZ Corporation has three companies: XYZ Corporation-US, headquartered in New York and operates in US dollars; XYZ Corporation-Germany, headquartered in Frankfurt and operates in Euros; and XYZ Corporation-Paris, headquartered in Paris and operates in Euros. Each company must define a base currency. The base currency represents the currency in which operations take place.