For accounting of multicurrency, it is very inevitable for accountant to know the difference between reporting currency and payment currency.
Reporting Currency
Reporting currency will the currency of that country in which service providers have provided services and that country's party who has taken service, will pay its price according to terms of services.
Payment Currnecy
Payment currency is the currency of service provider, it is duty of the person who is taking services to convert fees of reporting currency and pay it to service provider in his payment currency. Conversion of currency is done simply on the basis of foreign exchange updated data.
Explanation of Reporting Currency Vs Payment Currency with simple Example
Suppose, one USA company is taking services from Indian service provider. His earning will collected in reporting currency and at the time of payment, this fee is converted in currency of service provider and payment will be done and it is said that payment is done in payment currency.
Reporting Currency
Reporting currency will the currency of that country in which service providers have provided services and that country's party who has taken service, will pay its price according to terms of services.
Payment Currnecy
Payment currency is the currency of service provider, it is duty of the person who is taking services to convert fees of reporting currency and pay it to service provider in his payment currency. Conversion of currency is done simply on the basis of foreign exchange updated data.
Explanation of Reporting Currency Vs Payment Currency with simple Example
Suppose, one USA company is taking services from Indian service provider. His earning will collected in reporting currency and at the time of payment, this fee is converted in currency of service provider and payment will be done and it is said that payment is done in payment currency.
