Constant currency

Growth computed at a fixed exchange rate, shown beside reported growth at each period's rates, so a currency move is not read as a sales result. Conversion happens once at the entity ledger at the stated rate, never in the report.

DefinitionGrowth computed at a fixed exchange rate, shown beside reported growth at each period's rates, so a currency move is not read as a sales result. Conversion happens once at the entity ledger at the stated rate, never in the report.

Both figures

Reported says what the group booked. Constant currency says what sales did. The rates are in the footer.

Never on the fly

A report that converts at a looked-up rate produces a total that changes with the day it is run.

How it is computed

Both periods are translated at the same exchange rate, usually the prior period's average, and growth is computed on those figures and shown beside reported growth.

Example

A European subsidiary grew from 10.0 to 10.8 million euros, 8 percent. Reported in dollars it fell 2 percent because the euro weakened. Constant-currency growth is 8 percent.

Where it goes wrong

Mixing the two in one table, or choosing whichever looks better each quarter.

Articles that use this term

Data quality and reconciliation

Currency and multi-entity roll-ups: one identity across several ledgers

How a company with several legal entities and currencies builds one commercial roll-up that still reconciles: the entity as a level above region, one reporting currency at stated rates per period, the rule that conversion happens once at the entity ledger and never in the report, constant-currency comparisons beside reported ones, intercompany revenue excluded by rule, and the identity that the sum of entities in reporting currency equals the consolidated figure.

16 Sept 20262 min read