The functional currency is determined by considering the currency that most influences sales prices, costs and sources of financing. For most companies operating in Turkey the functional currency is the Turkish lira, but it may differ for some companies with predominantly export sales and foreign-currency financing.
Transactions in currencies other than the functional currency are treated as foreign currency transactions and give rise to exchange differences.
Source: TAS 21
Related terms
Exchange differencesThe difference arising from translating foreign-currency items at exchange rates on different dates.TAS 29 (Financial reporting in hyperinflationary economies)The standard requiring entities whose functional currency is the currency of a hyperinflationary economy to state their financial statements in terms of the purchasing power at the end of the reporting period.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Amortised costThe amount at which a financial asset or liability is measured at initial recognition, minus principal repayments, plus cumulative amortisation calculated using the effective interest method.AssociateAn entity over which the investor has significant influence but not control or joint control.BOBİ FRS (Turkish GAAP for SMEs)The financial reporting standard issued by the POA for large and medium-sized entities that are subject to independent audit but do not apply TFRS.
Last updated: October 22, 2026 · This definition is for general information only.