Multi-Currency Accounting and FX for Global SaaS
Written by Harry Prabandham
Curated by Rubric Financial
Last updated
1 / 5
Functional Currency Comes First
- Functional currency is the currency of the primary economic environment in which an entity operates, not simply where it is incorporated.
- Under ASC 830, you assess indicators such as the currency of pricing, cash flows, financing, and expenses to determine each entity's functional currency.
- Many early SaaS parents keep USD as the functional currency even when they invoice some customers in euros or pounds.
- A foreign subsidiary that pays local salaries and collects local revenue often has a functional currency different from the parent.
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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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