Oanda corporation Revision 5

Forex Hedge Accounting Treatment  

OANDA’s FXConsulting 

 

for Corporations

   

29 

 

Appendix A – Concepts and Terms 

 

To assist our discussion of forex accounting, we will review some concepts and terms. 

Accounting Currency Types 

Functional Currency is used to record the transactions and report their financial results for the 

company. Typically, the company conducts a majority of its business activities in the functional 

currency (often it’s the local currency where the company operates). For example, a Japanese company 

operating in Japan would likely use the Japanese Yen as its functional currency.