In OFSAA, there are primarily three types of currencies. These are the transactional currencies, reporting currencies and functional currency. A reporting currency is a currency into which the balances from other currencies can be consolidated. After consolidation has been performed, then reports can be generated in the reporting currencies. The balances from the reporting currencies can be further consolidated into the functional currency.
For example, a large European bank might consolidate its holdings in Asian currencies to the Japanese yen (reporting currency) and its balances American continent into USD (reporting currency) after which it might consolidate these reporting currencies to the Euro (functional currency).
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