BC4 The term 'reporting currency' was previously defined as 'the currency used in presenting the financial statements'. This definition comprises two separate notions (which were identified in SIC‑19 Reporting Currency - Measurement and Presentation of Financial Statements under IAS 21 and IAS 29):
• the measurement currency (the currency in which the entity measures the items in the financial statements); and
• the presentation currency (the currency in which the entity presents its financial statements).
The Board decided to revise the previous version of IAS 21 to incorporate the SIC‑19 approach of separating these two notions. The Board also noted that the term 'functional currency' is more commonly used than 'measurement currency' and decided to adopt the more common term.
BC5 The Board noted a concern that the guidance in SIC‑19 on determining a measurement currency could permit entities to choose one of several currencies, or to select an inappropriate currency. In par
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