A company from the United Kingdom uses British pounds in its normal operations, reports in the European Union in euros, and reports in the United States in U. S. dollars. The company is owned by a private equity firm in Japan. What is the company's functional currency?

Question

Business

Allen Clarke

19 October, 16:20

A company from the United Kingdom uses British pounds in its normal operations, reports in the European Union in euros, and reports in the United States in U. S. dollars. The company is owned by a private equity firm in Japan. What is the company's functional currency?

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Answers (1)

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Alexander Robbins · Answer 1

The British pound

Explanation:

The functional currency of a company is the currency used in the primary economic environment in which the company operates. This means that the company's functional currency is the currency used in the place where the company earns its revenues and pays its expenses. In this case, the company operates in the United Kingdom, therefore its functional currency is the British pound.